THE trade war between the United States and China has led to South Korea undergoing a significant decline in economic growth due to international economic headwinds and geopolitical disruptions, reports American Shipper.
South Korea's gross domestic product (GDP) contracted 0.3 per cent during the first quarter of 2019, according to the Organisation for Economic Co-operation and Development (OECD). South Korea's lack of economic growth in the first quarter of 2019 is due to its dependence upon exports to the US and China.
The country's economy is built upon an industrial manufacturing base, which is common among export-focused economies. According to the World Bank, industry accounts for more than 39 per cent of South Korea's economy. That is more than double the percentage of its second-largest trading partner, the US.
China is by far the largest trade partner for South Korea, with more than 25 per cent of South Korea's exports being shipped to China and over 20 per cent of its imports coming from China.
As China is focused on dealing with the US and the ongoing trade war, China's imports from countries such as South Korea, Germany and Japan have declined year over year. Exports from China to South Korea also have fallen as domestic manufacturing has struggled during the trade war.