Stock market's Kospi closes with a rise, as tariff discussions are delayed; WIN increases significantly
In a recent development, the postponement of the high-level trade talks (2+2 talks) between South Korea and the United States has introduced short-term uncertainty and risk to the South Korean stock market. The talks, which were scheduled for Friday, were postponed due to an urgent scheduling conflict for US Treasury Secretary Scott Bessent.
The US plans to begin imposing 25% reciprocal tariffs on certain South Korean goods starting August 1, following previous tariffs on steel and automobiles. These tariffs had been temporarily delayed to allow negotiations, but now face a firm deadline. South Korea's government is preparing a trade package aimed at a mutually agreeable deal to ease tariff risks.
Despite the postponement, South Korea continues consultations through other ministers who are already in Washington, reflecting ongoing efforts to avoid escalation and tariff imposition. The US-South Korea trade relationship remains a critical one, with South Korea being the fifth-largest export market for the US.
The uncertainty and risk of tariffs generally create downward pressure on exporter-heavy stocks, particularly in steel, autos, semiconductors, and shipbuilding. However, the market impact has been limited or contained because negotiations continue and there is cautious optimism that a deal or delay could be reached.
In Thursday's session, battery and shipbuilding shares were particularly strong, with Doosan Enerbility surging by 3.15 percent and HD Hyundai Heavy rising by 1.69 percent. LG Energy Solution increased by 9.36 percent, while Samsung Biologics climbed by 2.26 percent. However, major Korean automobile firms trimmed their earlier gains or turned to losses after the news of the trade talks postponement. Samsung Electronics lost 0.6 percent, while Samsung SDI advanced by 3.09 percent.
Trade volume was moderate at 422.4 million shares worth 12.9 trillion won ($9.4 billion). Losers outnumbered winners in the trade, with 707 losers compared to 192 winners. Hanwha Aerospace soared by 3.41 percent, and Hanwha Ocean jumped by 6.35 percent. SK hynix rose by 0.19 percent after reporting record high operating profit and sales for the April-June period.
If tariffs are imposed without an agreement, stocks of affected export sectors would likely face stronger negative impacts due to reduced competitiveness and profit margins. The South Korean economy showed 0.6% GDP growth in Q2 2025, indicating some resilience despite trade pressures.
In summary, the postponement of the trade talks has introduced short-term uncertainty and risk to the South Korean stock market, particularly in export-driven sectors. However, ongoing "productive" negotiations and South Korea’s economic resilience have so far kept the market impact limited. The situation remains fluid, with the potential for more significant market reactions depending on whether a deal is finalized before the August 1 tariff deadline or if tariffs are imposed as planned.
The US-South Korea trade tension, with the impending tariffs on certain goods, is a concern for the finance and business sectors, as it could negatively impact some industries such as steel, automobiles, semiconductors, and shipbuilding. This uncertainty in politics and general-news could worsten the situation for affected export sectors, resulting in reduced competitiveness and profit margins. However, the ongoing negotiations offer a glimmer of hope for a mutually agreeable deal that could ease tariff risks, which poses potential stability for South Korea's stock market.
