The South Korean won fell sharply against the US dollar on Monday, reaching its lowest point of the year amid growing concerns over the economic impact of new tariffs announced by US President Donald Trump. The decline reflects increased uncertainty surrounding the Korean economy, as heightened trade tensions threaten to affect key South Korean industries with international exposure. The Korean currency opened at 1,466 won per dollar, marking a drop of 13.3 won from the previous trading session.
By 10 a.m., the won had weakened further to 1,471.35 against the dollar. This rate surpasses the prior yearly low of 1,470.8 won, recorded on January 13. Market analysts attribute this trend to a combination of external pressures from US trade policies and domestic political challenges. Since December, the won has consistently hovered near the 1,450 level, its weakest point since March 2009, when the global financial crisis severely impacted the South Korean economy.
The continued depreciation is largely driven by the strengthening of the US dollar, compounded by the announcement of significant tariff measures by the Trump administration. Additionally, South Korea is grappling with internal political instability, highlighted by President Yoon Suk Yeol’s declaration of martial law, which has further weighed on investor sentiment. On Saturday, President Trump unveiled plans to implement a 25 percent tariff on imports from Canada and Mexico and a 10 percent tariff on goods from China, effective Tuesday.
He also indicated forthcoming tariffs on European Union products. These sweeping measures are expected to provoke retaliatory actions from affected countries, potentially disrupting global trade flows. The ramifications of these tariffs could be particularly severe for South Korean companies with substantial production operations in North America, China, and Europe. Analysts are concerned that the increased costs and trade barriers might erode the profitability of major South Korean manufacturers, thereby exacerbating the won’s vulnerability.