Trump tariffs threaten South Korean economy more than crisis

The tariffs announced by U.S. President-elect Donald Trump pose a greater threat to South Korea's economy than the recent political turmoil related to the removal of President Park Geun-hye from office, says Ri Chang Yong, president of the central bank in Seoul.

In an interview with the "Financial Times," Ri emphasized that external factors, such as the growing protectionism in international trade, currently raise more concern than the country's internal problems. He said the announcement of tariffs is the main reason why we Koreans lowered our economic forecasts for this year and the next.

Ri noted that the South Korean economy, heavily reliant on exports, may suffer more from potential trade barriers imposed by the U.S. than from the domestic political crisis. He added that the external factors are currently introducing more uncertainty than internal ones.

At the same time, the central bank president admitted that the political deadlock might delay the implementation of key structural reforms. He recalled, however, that South Korea's economy has already survived similar challenges in 2004 and 2016, when it also faced crises at the highest levels of power.

After President Park Geun-hye was removed from office as a result of a corruption scandal, the country faced political uncertainty. Despite this, as reported by the FSC, state institutions, including the central bank, continue to work, focusing on minimizing the impact of external threats on the economy.