Bank of Korea Governor Sounds Alarm on Economic Impact of Trade Disputes

Bank of Korea Governor Rhee Chang Yong, commended that the tensions from U.S. President Donald Trump’s tariffs are “bad for everybody”, not alone for South Korea. Late on Wednesday, he stated, “I really hope this trade tension will dissipate, because it’s bad for everybody.” At the IMF-World Bank Spring Meeting, reported to CNBC, Rhee said that trade tensions have caused headwinds for the South Korean economy, and hazard to economic growth will be increased.

He gives an instance of how Korea will be affected directly by the U.S and indirectly by their tariffs to other countries with semiconductor production in Vietnam, car and electronics production in Mexico, and their battery production in Canada. From the fourth quarter of 2020, South Korea’s GDP contracted 0.1% and shrank year-on-year in its first quarter. The GDP figures missed the 0.1% rise expected by Reuter’s poll, and are a reversal compared to the 1.2% rise in the last quarter of 2024.

Han Duck-Soo, the Acting President of South Korea, expects to have a talk with the U.S. for a better outcome benefits both sides. South Korea’s presidential election will be held on June 3, 2025, as the central bank of Governor said that it will affect the country’s growth because of the political uncertainty of this election and the accusation trials of former President Yoon Suk Yeol and Prime Minister Han Duck-soo dragged on in the first quarter, with the Constitutional Court striking down Han’s charge in March and reestablishing him as acting president, before April 4.