As South Korea approaches its June 3 presidential election, it grapples with economic challenges intensified by renewed US tariffs and internal political instability.

South Korea’s leading political and economic figures are setting their sights on revitalizing trade and revamping key economic policies after the Trump-era tariffs that strained international commerce and rattled Asia’s fourth-largest economy.

A presidential election is scheduled next month to select the successor to conservative leader Yoon Suk Yeol. The presidential candidates include Kim Moon-soo and Lee Jae-myung.

South Korea’s presidential hopefuls aim to revive struggling economy

South Korea intends to select a new leader who can lead its slowing economy to new heights in an attempt to take new directions. During their campaigns, the two leading candidates are working to demonstrate their commitment to the race.

Lee Jae-myung, a sitting member of the National Assembly, has sought voters with a pledge of a “fresh start” and a “new road of hope.” And his campaign has grown, probably because he promises a unified front for addressing the current trade crisis under the Trump administration’s international tariffs.

If elected, Lee has vowed to improve the frayed ties with North Korea, which is still technically at war with the South, and to deepen the South’s diplomatic ties with Europe.

One of his party’s main platforms is ramping up the economy by increasing the size of the K-pop and artificial intelligence industries.

The second candidate, Kim Moon-soo, a former Minister of Employment and Labor of South Korea, launched his campaign at a public wholesale market in Seoul, pledging to boost small businesses in the downturn economy.

Two of Kim’s main policy proposals were creating jobs and an atmosphere conducive to business. He has suggested that he and Trump have an urgent summit to discuss tariffs if he is elected.

Additionally, Kim stated that while he would prioritize strengthening the security partnership with the United States, he would obtain the authority to reprocess nuclear fuel to look for a way to advance the nation’s nuclear weapons program, a significant step in the process.

Economists warn of stagnant growth 

Based on a survey of economists, South Korea’s economy hardly expanded last quarter as weak domestic demand and ongoing concerns about global trade continued to erode momentum.

The median forecast of 23 economists in the poll conducted from April 15–21 indicated that South Korea’s GDP grew by a seasonally adjusted 0.1% in the previous quarter, which is comparable to the growth rate of the last two quarters of 2024.

The nation was dealing with its worst political crisis in decades, which included the president’s impeachment. In addition, US President Donald Trump’s high tariffs on important exports to the United States further exacerbated consumer sentiment.

The Bank of Korea cautioned in an April 17 report that the country’s export-driven economy may have contracted during the year’s first quarter. Frederic Neumann, Managing Director and Chief Asia Economist at HSBC, also forecasts that South Korea will likely face continued economic challenges throughout the rest of 2025, citing expected slowdowns in major economies such as China, Europe, and the United States.

Still, there is growing optimism that a new president focused on trade reform and economic revitalization could pave the way for a gradual rebound in South Korea’s GDP.

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