Seoul vows vigilance in face of Trump policy uncertainty

Audio report: written by reporters, read by AI

The Korean government reiterated its resolve to address heightened uncertainty surrounding the new Donald Trump administration’s monetary and tariff policies, following the U.S. central bank’s decision to hold its benchmark rate steady in its first meeting under the new president.

“Considering that external uncertainty surrounding the new U.S. government’s monetary and external policies remain significant, the government will remain vigilant and continue to operate its around-the-clock monitoring system for the financial and foreign exchange markets,” said acting President and Minister of Economy and Finance Choi Sang-mok during a meeting on macroeconomic and financial issues on Thursday.

Choi also promised that the government would closely monitor the Trump administration’s policy directions and its implications on the market, as Washington’s universal tariff plan is expected to significantly impact Korea’s export-driven economy.

Washington recently threatened Colombia with huge tariffs and sanctions after the country turned away military flights carrying deported migrants, which led to Bogotá conceding to Trump’s terms.

The Thursday meeting, attended by Bank of Korea Gov. Rhee Chang-yong, Financial Services Commission Chairman Kim Byoung-hwan and Financial Supervisory Service Gov. Lee Bok-hyun, followed the U.S. Federal Open Market Committee’s (FOMC) first policy meeting under the new administration.

The attendees agreed that the current financial and foreign exchange market situations require close monitoring, according to a release from the Ministry of Economy and Finance, given the delayed rate cuts in the United States and expanded volatility in tech stocks driven by the emergence of Chinese AI startup DeepSeek.

The U.S. central bank decided to keep its key interest rate unchanged at 4.25 to 4.5 percent, in line with market expectations, holding off on a further reduction after three straight cuts from September last year.

Inflation “remains elevated,” the FOMC said in a release on Wednesday following its two-day rate-setting meeting, indicating a cautious stance on additional rate cuts.

"With our policy significantly less restrictive than it had been, and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” said Federal Reserve Chair Jerome Powell in a news conference following the FOMC meeting.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]