본문 내용으로 건더뛰기

KDI 경제정보센터

ENG
  • Economic

    Information

    and Education

    Center

최신자료
Is South Korea de-risking?
PIIE
2024.02.02
The de-risking happening in Korea‘s supply chains and trade structure can be attributed to a combination of market forces such as China‘s upgraded technological capabilities, Korean companies‘ diversification, and government actions such as China‘s move towards self-reliance, economic coercion, and US industrial policy. The effects of de-risking in South Korea have yet to be seen, but it is a legitimate rebalancing act for any country to hedge against the overdependence of its trade portfolio on one country and the possible weaponization of the overdependence.

Risks can run to the US side as well as China. A new US administration could overturn the direction of US industrial and climate change incentives for EVs and batteries, posing a big risk to South Korea and other allies. The trade surpluses that South Korea recorded with the United States in 2023 might provoke a political backlash in the United States over its surging trade deficit with Korea. Both sides need to maintain coherent, stabile trade relations through the Korea-US Free Trade Agreement framework, now in its 12th year of implementation, in order to accelerate de-risking and secure resilience in critical nascent supply chains emerging between the United States and the Indo-Pacific region.