SEOUL, Dec. 10 (Korea Bizwire) — South Korea may have been hit the hardest among major economies by the protracted trade dispute between the United States and China due to its high dependence on exports to the countries, a report said Tuesday.
The U.S. and China are the world’s largest importers of South Korean products with shipments to China accounting for more than one-quarter of South Korea’s overall exports last year, according to the report from the Woori Finance Research Institute.
In 2018, shipments to China accounted for 26.8 percent of South Korea’s overall exports, compared with 19.5 percent for Japan, 7.1 percent for Germany and 4.2 percent for France, the report added.
Consequently, South Korea’s exports plunged 9.8 percent on-year in the January-September period, the largest margin among the world’s top 10 trading nations.
Outbound shipments of Britain dipped 6.3 percent on-year over the cited period, while those of Germany and Japan slipped 5.1 percent and 4.4 percent, respectively.
But because of South Korea’s such large exposure to the risks stemming from the Sino-American trade dispute, the report insisted its exports may rebound just as quickly should Washington and Beijing reach an initial deal in their ongoing trade negotiations.
“Since South Korea was most negatively affected by the rise in import tariffs (of U.S. and China), a deal in the first phase trade negotiations will have a positive impact on South Korea’s economic growth next year by boosting global investment sentiments and trade,” the report said.
In a separate report, the institute said the U.S. and China were widely expected to reach an initial deal before the end of next month.
In a recent survey of experts from 18 financial institutes in Hong Kong and Singapore, 53.6 percent of those surveyed expected the countries to strike a deal before the year’s end or at least before the Lunar New Year’s Day, which falls on Jan. 25, it said.
A second-stage deal, however, may take more time, with less than 32 percent of those surveyed anticipating a second-stage deal before the U.S. presidential election in November next year, the report added.