'Trump Risk' Intensifies... Export Companies Express "Concerns Over Business Deterioration"

With the full-scale onset of the 'Trump risk,' it was found that 4 out of 10 of our export companies are concerned about an overall deterioration in management. In particular, companies were confirmed to be considering 'discovering alternative markets' the most as a response to changes in the US trade environment, which is comparable to a 'tariff war,' rather than 'expanding local production.'

According to the report "2025 Management Environment Outlook for Export Companies," published on the 4th by the Korea International Trade Association's International Trade and Commerce Research Institute, nearly half of our export companies, 48.6%, expected the overall management environment to be similar to last year, but 37.3% were concerned about deterioration compared to the previous year. Only 14.2% of companies expected the situation to improve compared to last year. The survey was conducted on 1,010 export companies.

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By company size, concerns about worsening management conditions were highest among large companies. The responses that the management environment would worsen this year were in the order of large companies (45.3%), small and medium-sized enterprises (38.4%), and mid-sized companies (32.1%).

By product category, the only sector expected to see an improvement in the management environment was the shipbuilding sector, which US President Donald Trump publicly expressed interest in. This was due to an increase in order volume combined with expectations of improved investment activities. Fields such as semiconductors, electrical and electronics, automobiles, and medical, precision, and scientific instruments mostly expected conditions to be similar to last year. In sectors such as chemical products, wireless communication devices and components, and plastic, rubber, and leather products, concerns about management deterioration and domestic and foreign investment contraction were significant.

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Many viewed the impact of the US's introduction of a 'universal tariff' as limited. 55.5% of respondent companies believed that even if universal tariffs were imposed, exports to the US would remain similar to the previous year. Since the tariffs would be applied equally to all countries, it is interpreted as 'competition under the same conditions.'

The industries expected to see an increase in exports to the US despite tariff impacts included the shipbuilding sector. Telecommunications related to infrastructure construction and beauty devices and cosmetics benefiting from the Korean Wave's popularity were also viewed positively.

As a response to changes in the US trade environment, companies were considering ▲discovering alternative markets (27.3%) ▲cost reduction (25.6%). Only 4.1% of companies chose 'expanding local production,' the smallest proportion.

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With overall uncertainty increasing, export companies are expected to maintain a cautious stance on investment. More than half of the companies responded that both domestic and overseas investments would remain at levels similar to last year. Companies planning to reduce domestic investment accounted for 22.2%, while those planning to expand were 16.6%. Similarly, for overseas investment, 21.8% planned reductions, and 19.5% planned expansions.

Additionally, export companies identified ▲exchange rate stability (28.1%) ▲logistics support (15.7%) as the top priority policies for improving the management environment. Calls for ▲new market development (14.3%) ▲tax support (13.8%) followed. Regarding the recent rise in exchange rates, while some aspects were evaluated as favorable to export companies, opinions were expressed that policy support should be strengthened to cope with excessive volatility.

Huslby, a researcher at the Korea International Trade Association, analyzed, "The large fluctuations in exchange rates have resulted in high uncertainty in fund management," and "logistics costs are also difficult to predict due to geopolitical instability." He added, "Along with policy support, preparations must be made for additional protectionist measures that may be implemented in the future."

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