Korea Investment & Securities: "Tariff Uncertainty Has Peaked... Positive on Semiconductors and Shipbuilding"

Korea Investment & Securities stated that tariff uncertainties have peaked following a US-China trade agreement that significantly exceeded market expectations, and maintained a positive outlook on semiconductors, shipbuilding, defense, and machinery sectors in the domestic stock market. However, the company added that since the structural issues that triggered the tariff war still remain, whether the agreement will be implemented after the 90-day period will be a key variable.

On May 14, Park Kihun, a researcher at Korea Investment & Securities, said in a report titled "Tariff Uncertainty Has Peaked," "From an investor's perspective, it is important to view this agreement as a conditional easing rather than excessive optimism."

Park stated, "In the short term, there may be a rebound in sectors that were most affected by tariffs." However, he also predicted, "In the mid- to long-term, sectors with less exposure to tariffs and solid earnings momentum will continue to lead the market." He added, "We maintain a positive view on semiconductor, shipbuilding, defense, and machinery-related stocks, where earnings forecasts are being revised upward in Korea."

At 4:00 p.m. on May 12, Korea Standard Time, the United States and China announced a trade agreement that included mutual reductions of high tariffs and a 90-day grace period. As a result, starting May 14, the US will lower tariffs on Chinese goods from 145% to 30%, and China will reduce tariffs on US goods from 125% to 10%.

Park noted, "The market immediately responded positively to the US-China trade agreement. This reflects the easing of trade uncertainties and a recovery in risk appetite." However, he also pointed out, "The structural issues remain unresolved." He argued that positive signals or excessive optimism should be approached with caution.

Specifically, Park stated, "The negative impact of tariffs on the macro environment has not been resolved," and mentioned that the Donald Trump administration is still insisting on a universal 10% tariff across the board. He also emphasized that this agreement is a 'grace period,' saying, "There is no certainty that there won't be a reversal as seen during the first US-China trade dispute." Ultimately, follow-up negotiations and implementation after the 90-day period are crucial. In addition, he cited newly visible US-imposed item-specific tariffs on pharmaceuticals and semiconductors as further burdens.

This content was produced with the assistance of AI translation services.