FX.co ★ South Korean Won Slips Amid Tariff Uncertainty

The South Korean won depreciated to approximately 1,383 against the US dollar on Tuesday, continuing its decline amid ongoing scrutiny of trade negotiations between South Korea and the United States. The discussions aim to prevent tariffs as high as 25% on significant exports, including automobiles, steel, and semiconductors. Although Trade Minister Yeo Han-koo indicated on Monday that a comprehensive agreement might not be attainable within the next 20 days, he expressed optimism for achieving an "in-principle" deal to fend off the imminent tariff threat. Yeo also mentioned that South Korea might consider negotiating US agricultural access as part of a larger "strategic judgment," though protecting sensitive sectors remains a priority. This uncertainty has prompted investors to favor safer assets, notably the US dollar. A weakened won heightens the burden of dollar-denominated liabilities and import expenses, especially for energy and raw materials, potentially adding to inflationary pressures. Conversely, the depreciation enhances the global competitiveness of Korean exports, providing short-term relief for crucial industries. The currency's decline underscores trepidation regarding the negotiations' speed and possible outcomes.