U.S. tariff measures could shrink American market, reshape global trade dynamics: KITA

The implementation of U.S. tariff measures could shrink the American market and reshape global trade dynamics to potentially weaken the competitiveness of South Korean products, a local industry report showed Wednesday.

According to the report by the Korea International Trade Association (KITA), among the top 10 exporting countries to the United States, only South Korea and China posted negative U.S. export growth in the four months of this year, in contrast to most countries that saw increases in shipments to the U.S.

KITA compared changes in export competitiveness among major countries in the U.S. market between 2016 — just before the start of President Donald Trump’s first term — and 2023.

The agency said that as the U.S. ramped up trade restrictions on China and reinforced protectionist policies, China’s presence in the American import market diminished.

Meanwhile, Mexico and India have capitalized on this shift, intensifying competition with South Korea.

The report warned that if country-specific reciprocal tariffs are implemented, the overall size of the U.S. import market could shrink, and competition between nations over overlapping export items would intensify.

“To mitigate the potential impact of reduced exports to the U.S. due to reciprocal tariffs, (domestic) companies should diversify production bases, cut production costs to lower the taxable price of goods and expand exports of items that are either hard to replace or challenging to produce domestically in the U.S.,” a KITA official said.