Forex volatility, US tariffs biggest external risks for S. Korean exporters

Seoul, Feb 18
Volatility in the foreign exchange (FX) market and the United States' tariff policies pose the biggest risks for South Korean exporters, the companies said in a survey released on Wednesday.

In the survey conducted on 1,193 export firms here by the Korea International Trade Association (KITA), 28.6 per cent said their business environment in 2026 would be similar to that of last year, while 31.1 per cent expected improvements and 30.3 percent anticipated worsened conditions, reports Yonhap news agency.

More than 47 per cent of the companies have set a higher sales target for 2026 than last year, while over 80 per cent said they plan to continue or expand investment in both domestic and overseas markets this year.

On possible threats to their business, FX volatility and U.S. tariffs were cited most frequently at 43.5 per cent and 40.1 per cent, respectively.

The surveyed companies said they have been experiencing higher import prices for raw materials and pressure from foreign buyers to cut prices due to the recent weakness of the Korean won.

They also expressed concerns over the rapid rise of Chinese rivals, assessing the competitiveness of Chinese firms at 99.1 to 99.3 per cent of their own.

In the same survey conducted three years ago, the corresponding figures stood at 95.8 to 97 per cent.

Notably, the proportion of companies that rated Chinese competitors' competitiveness at 110 per cent or more of their own more than doubled this year from 10 per cent tallied in 2023, according to KITA.

By sector, Chinese firms were viewed to be more competitive than Korean firms in petroleum products, home appliances and steel, while South Korean businesses continue to have the upper hand in the semiconductor, medical equipment and other advanced industries.

The survey showed that nearly half of Korean companies want the government to focus on stabilising the local currency to create a more favourable environment for exports, while another 28 percent stressed the need for efforts to minimise trade risks through negotiations with major economies