President-elect Donald Trump is expected to deal an enormous blow to
Korea Inc. which is heavily reliant on exports as he has vowed to
strengthen trade barriers.

Youn Woo-jin, a senior researcher at the Korea Institute for
Industrial Economics and Trade, said that the result of the U.S.
election will adversely affect Korea''s already faltering exports on
increasing risks of a slowing economy there as well as aggressive
protectionism.

President-elect Trump has been pledging strong protectionism, which
even most of his fellow party members criticized as populism.

"Trump has been moving away from the Republican Party, which has been
a traditional guardian of free trade," Youn said.

He pointed out that Trump had been vowing to adopt far-fetched
protectionist measures, such as a withdrawal from negotiations over
the Trans-Pacific Partnership, the renegotiation of the North
American Free Trade Agreement, and high tariffs on imports from
Mexico and China. Trump has also denounced the Korea-U.S. Free Trade
Agreement (FTA) as a "job killing" deal, leading to speculation that
his victory will lead to renegotiations or a complete scrapping of
the deal.

Youn, however, said that such pledges are "little likely to be
realized as there should be cooperation from Congress, as well as
when taking into account the huge impact this will have on the global
economy."

The Korea Trade-Investment Promotion Agency (KOTRA), meanwhile,
expects Trump will demand a renegotiation of the Korea-U.S. FTA, on
top of strong pressure such as antidumping and countervailing duties.

"Even if the U.S. Congress opposes these moves, Trump may be able to
scrap the FTA or levy high tariffs on certain countries, with the
authority endowed to the president," said Yun Won-sok, executive vice
president for business information and trade at KOTRA, pointing out
that the diverse trade related laws give considerable authority to
the president.

However, he added that trade with Korea may have less priority in
Trump''s agenda as he has been more aggressively criticizing China and
Mexico.

He has pledged levying a 45 percent tariff on Chinese products and
levying a 35 percent tariff on Mexican-produced cars.

A trade war with China will also weigh on the Korean economy which
has been exporting components and materials to China. The hard-
landing of the Chinese economy also means that Korea''s biggest export
market will be diminished.

As other countries will also retaliate against the United States,
Trump is likely to trigger a protectionist trade war. This means the
Korean economy, which has been heavily relying on exports, will be
further pressured. Korea''s exports briefly rebounded in August
following 19 months of falls, but they dipped again in September and
October.

Youn also expects the U.S. economy to enter a recession with the
trade war, with the economic growth rate projected to fall from 2.7
percent in 2016 to 0.3 percent in 2017, and to minus 0.1 percent in
2019. A recession in the United States in itself is also negative for
Korean exporters.

However, some businesses may find bigger opportunities to advance
into the U.S. market as Donald Trump has pledged massive
infrastructure investment.

"Based on Trump''s public infrastructure policy, construction,
communication, logistics and construction materials will likely see
markets expanding," Yun said.

Trump has also stressed opening the pharmaceutical market for higher
efficiency of the U.S. public health system. Yun said this may be an
opportunity for Korean pharmaceutical exporters as well.