BNY Head of Markets Macro Strategy Bob Savage discusses the impact of recent U.S. tariff increases on South Korean imports, which have risen to 25%. Despite initial weakness in the Korean Won (KRW), domestic sentiment and foreign equity inflows have helped stabilize South Korean assets. The report also highlights broader market dynamics influenced by geopolitical factors and trade agreements.

Market resilience in face of tariffs

"The U.S. has raised tariffs on South Korean imports to 25%, hitting autos, pharmaceuticals and other sectors. Although KRW initially weakened, resilient domestic sentiment, policy support and renewed foreign equity inflows helped South Korean assets to stabilize."

"Markets are in 'risk-on' mode again, with equities rallying and carry trades dominating FX. Nevertheless, underlying fragilities persist from tariffs, volatile rates (especially in Japan) and geopolitical uncertainties."

"The U.S. tariff hike on South Korean imports, the conditional nature of U.S. security guarantees for Ukraine and the India-EU free trade deal together underscore how trade and geopolitics are increasingly shaping cross-asset performance and regional capital flows."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)