South Korean Industries Prepare for Potential Tariff Impact on U.S. Market

Feb 5, 2025 at 2:56 PM

Amid rising trade tensions, South Korean companies in the food, fashion, and beauty sectors are preparing for potential tariff disruptions. The recent announcement of additional tariffs on Chinese imports has raised concerns that South Korea could be next. For instance, Samyang Foods, a leading manufacturer of popular "Buldak" stir-fried noodles, relies heavily on exports from its South Korean factories. If tariffs are imposed, the company may need to reassess its pricing strategy or absorb some financial losses.

Several companies are already taking proactive measures to mitigate risks. Daesang, which produces kimchi both in South Korea and the United States, is closely monitoring policy changes. Meanwhile, others like SPC Group, known for Paris Baguette, are investing in U.S.-based production facilities. SPC plans to construct a bakery plant in Texas, aiming for completion by late 2027. CJ Foodville, another major player, is set to finalize a Georgia-based factory this year with significant production capacity. These moves demonstrate a strategic shift towards localized manufacturing to adapt more flexibly to changing trade policies.

The fashion and beauty industries are also feeling the pressure. K-beauty brands, celebrated for their quality and affordability, have rapidly expanded in the U.S. market. Last year, South Korea's cosmetics exports hit a record $10.2 billion, with the U.S. being the second-largest destination. To safeguard against potential setbacks, industry experts are exploring diversification strategies, including partnerships with local manufacturers. By fostering these collaborations, companies aim to enhance resilience and continue thriving in the competitive global market.