East Asian Industry Decline: Analysis by Keun Lee
- SEOUL - East Asian economies, particularly Japan and South Korea, are facing escalating economic pressures stemming from both shifts within China's economic structure and the imposition of tariffs...
- Recent years have witnessed a significant alteration in trade and investment patterns across East Asia and global supply chains.A primary driver of this change has been the United...
- China is moving towards a more consumption-driven economy, reducing its reliance on exports and focusing on technological self-sufficiency.
SEOUL – East Asian economies, particularly Japan and South Korea, are facing escalating economic pressures stemming from both shifts within China’s economic structure and the imposition of tariffs by the United states. These pressures necessitate a strengthening of economic ties between Japan and South Korea, alongside collaborations with other stable international partners, to protect key industries.
Shifting trade Dynamics and US Tariffs
Recent years have witnessed a significant alteration in trade and investment patterns across East Asia and global supply chains.A primary driver of this change has been the United States’ increased use of tariffs, particularly during the administration of donald Trump (2017-2021) and continuing, albeit with modifications, under the Biden administration.The US-china trade war, initiated in 2018, involved reciprocal tariffs on hundreds of billions of dollars worth of goods, disrupting established trade flows and forcing companies to reassess their supply chain strategies.
China’s Economic Restructuring
Concurrently, China’s economic model is evolving. China is moving towards a more consumption-driven economy, reducing its reliance on exports and focusing on technological self-sufficiency. This transition impacts regional economies like Japan and South Korea,which have historically benefited from being key suppliers to China’s manufacturing sector. Recent economic challenges in China, including a property market crisis and slowing growth, further exacerbate these pressures.
The Need for Regional Cooperation
The combined effect of US tariffs and China’s economic restructuring creates a challenging environment for Japan and South Korea. Deepening economic engagement between the two countries – despite historical political tensions - is seen as crucial.This includes fostering joint ventures, streamlining trade procedures, and collaborating on technological growth. Expanding partnerships with other nations, such as those within the Association of southeast Asian Nations (ASEAN) and perhaps strengthening ties with the European Union, can further diversify economic relationships and mitigate risks. As of January 11, 2026, there have been no major shifts in US tariff policy or China’s economic direction that fundamentally alter this assessment. Ongoing monitoring of these factors remains critical.