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Tariff deal with U.S. 'significantly' reduces economic uncertainty: BOK chief

Published: 18 Nov. 2025, 17:06

This file photo taken Nov. 4, shows Bank of Korea Gov. Rhee Chang-yong speaking during a conference in Seoul.

The recent tariff agreement with the United States has substantially reduced economic uncertainty for Korea, though the country is expected to face a greater tariff impact on exports in the second half, the chief of the central bank in Seoul has said.

"We believe that the trade deal between Korea and the United States has significantly reduced uncertainties," Bank of Korea (BOK) Gov. Rhee Chang-yong told the BBC in an interview aired Tuesday.

"It would be very positive if we could develop joint ventures that combine the U.S. strengths in basic science with Korea's strengths in manufacturing and applied technologies," he added.

After months-long negotiations over the Donald Trump administration's aggressive tariff policies, Seoul and Washington finalized a deal and released a joint fact sheet last week outlining Korea's $350 billion investment plans in the United States in exchange for a reduction of U.S. tariffs from 25 percent to 15 percent.

Exports remained solid in the first half of this year thanks to proactive responses by Korean companies, but a more significant impact is expected in the second half, Rhee warned.

The top central banker noted that Korea had been preparing for changes in global supply chains even before global trade tensions arose, diversifying markets and adjusting business operations, and the adjustments are necessary not due to tariffs but because of China's rapidly growing competitiveness in certain industries.

"Luckily, I think Korea is in a good position for the new technology, especially artificial intelligence, because our AI industry is very strong not only in software but also in the hardware," Rhee said.

Addressing concerns about an AI bubble, he expressed optimism by saying that the technology will drive demand for smaller, everyday products, which will sustain demand for traditional legacy chips as well.

"Regardless of who's going to be winners in this big AI race, definitely the AI boom will continue," Rhee said.

Yonhap