Downside risks increasing amid US tariff woes: finance ministry

Containers are stacked at a port in Busan, April 3. Yonhap

Korea's economy is facing increasing downside risks amid U.S. tariff woes while recovery in domestic demand is being delayed, the finance ministry said Friday.

The ministry has maintained its assessment since January that economic downside risk has been increasing due to a slowdown in export growth and domestic demand.

But this month, the finance ministry highlighted worsening external conditions that stem from the U.S. tariffs.

"There are concerns that worsening trade conditions caused by tariffs by major economies would increase market volatility and cause a slowdown in exports and economic growth," the ministry said.

U.S. President Donald Trump announced a 90-day suspension of newly imposed reciprocal tariffs on imports from major trading partners, including Korea, just hours after the sweeping scheme took effect Wednesday.

But the universal 10 percent tariff on all imports remains in place, along with 25 percent tariffs on steel, aluminum and automobiles entering the United States.

Korea's industrial output, retail sales and facility investment increased from a month earlier in February, marking the first time in 17 months that the three key indicators rose simultaneously.

Exports posted on-year growth for two consecutive months in February and March but are widely expected to face headwinds due to the U.S. tariffs and other risk factors.