The entire domestic manufacturing sector appears to be directly and indirectly exposed to U.S. tariff risks. President Donald Trump has announced plans for a reciprocal tariff on July 2, 2025, aimed at the tariff and non-tariff trade barriers of trading partner countries. He has also signed an executive order imposing a 25% tariff on all imported vehicles.
The Korea Chamber of Commerce and Industry (KORCHAM) revealed on June 1, 2025, that of the 2,107 manufacturing corporations surveyed nationwide regarding the impacts of U.S. tariffs, 60.3% reported being within the influence of President Trump's tariff policy. A total of 46.3% stated they are indirectly affected, while 14.0% said they are directly affected.
Among the corporations falling within the tariff influence, 24.3% are those that supply parts and raw materials to U.S. export corporations, and 21.7% export finished goods to the United States. Following them are 17.9% involved in exports and domestic sales to third countries (excluding China, Mexico, and Canada), 14.2% that export parts and raw materials to the U.S., and 13.8% that export to China.
In terms of industry, battery (84.6%) and automobiles and parts (81.3%) industries had the highest representation. It appears that many suppliers providing intermediate goods such as parts and materials to large domestic companies operating in the United States are included. Following were semiconductors (69.6%), medical precision (69.2%), electrical equipment (67.2%), machinery (66.3%), and electronics and communications (65.4%).
Corporations are most concerned about the ‘reduction in delivery volumes (47.2%)’ due to the impact of U.S. tariffs. This is interpreted as many corporations falling within the indirect influence despite not exporting directly to the U.S. Other concerns include ‘declining profitability due to high tariffs (24.0%),’ ‘decreased price competitiveness in the U.S. market (11.4%),’ ‘adjustment of supply chain for parts and raw materials (10.1%),’ and ‘lowered delivery prices (6.2%).
Amidst tariff imposition, corporations' responses are limited. In response to a question about their level of response, 74.5% stated they are either ‘monitoring trends (45.5%)’ or ‘seeking internal countermeasures such as production cost reduction (29.0%).’ Only 3.9% are seeking ‘local production or market diversification,’ and 20.8% said they have no response plans.
In particular, small and medium-sized enterprises such as parts, materials, and equipment suppliers lack response plans. Among small and medium-sized enterprises falling within the influence, 1 in 4 (24.2%) stated they have ‘no response plans.’ Those preparing measures for ‘production cost reduction’ or ‘tariff avoidance’ are significantly lower compared to large corporations.
Kim Hyun-soo, head of the economic policy team at KORCHAM, noted, “As U.S. tariffs come to fruition, manufacturing corporations may suffer significant impacts not only from exports to the U.S. but also from indirect effects like the low-price offensive from China.” He added, “Efforts must be made to minimize the impacts of tariffs through private networks and diplomatic channels, while support policies for the affected industries should be established.”