Stock market in Seoul experiencing a drop due to foreign selling, driven by worries over tariffs
The Seoul stock market opened lower on Friday, with the Korea Composite Stock Price Index falling by 4.76 points or 0.15 percent. This decline was led by steel and energy stocks, as major South Korean exporters felt the brunt of US tariff uncertainties.
In the first half of 2025, US tariffs have caused notable declines in South Korean exports of tariff-affected goods, including cars and steel. Companies like Hyundai Motor, POSCO Holdings, and SK Innovation have been significantly impacted. Hyundai Motor dipped 0.24 percent, while POSCO Holdings fell by 0.5 percent. SK Innovation shed 0.92 percent.
The US-South Korea trade framework imposes a flat 15% tariff on South Korean goods entering the US market, affecting volumes and import bookings to the US. Weekly container bookings to the US fell about 16% compared to 2024 through mid-2025.
Exports of semiconductor-related products, important to Samsung Electronics and LG Chem, have been relatively exempt from tariffs and have seen strong growth, partly mitigating the overall negative impact on the technology sector. Samsung shares extended gains for a second straight session, while LG Chem plunged 4.79 percent.
The tariff uncertainty and increased cost burden create pressure on exporters and may weigh on stock prices of export-heavy firms in Seoul, especially those exposed to US markets and tariff-sensitive goods. LG Energy Solution, active in energy materials and chemicals, lost 1.62 percent.
The semiconductor sector, represented by Samsung Electronics, has fared relatively better due to tariff exemptions and global demand resilience, which may cushion its stock performance relative to other sectors hurt by tariffs. However, these developments contribute to export volume declines, muted revenue growth, and stock market volatility in Seoul, as investors factor in higher trade costs and demand uncertainty linked to US tariff policy.
Among gainers, market bellwether Samsung Electronics rose 0.57 percent. Chip giant SK hynix climbed 0.95 percent. Overnight, the Dow Jones Industrial Average dropped 0.51 percent, while the Nasdaq Composite rose 0.35 percent. The local currency, the won, was trading at 1,381.05 won against the greenback at 9:15 a.m.
In summary, US tariff uncertainties in 2025 have exerted downward pressure on Seoul stock market sectors reliant on exports to the US, particularly steel, automotive, and chemicals, while semiconductor-related stocks like Samsung Electronics have been relatively less affected but not immune to the broader trade tensions and market volatility.
The tariff uncertainty in 2025 has significantly impacted business sectors in South Korea that rely heavily on exports to the US, particularly the steel, automotive, and finance industries, as seen in the decline of companies like Hyundai Motor, POSCO Holdings, and SK Innovation. The US-South Korea trade framework, with a flat 15% tariff on South Korean goods entering the US market, has led to a 16% decrease in weekly container bookings to the US.
The technology sector, represented by Samsung Electronics and LG Chem, has shown some resilience due to tariff exemptions for semiconductor-related products and global demand resilience, although it has not been completely immune to the broader trade tensions and market volatility. This volatility has contributed to export volume declines, muted revenue growth, and stock market instability in Seoul.
