This report does not constitute a rating action. Major Korean corporations face a difficult and murky landscape over the next year. U.S. tariffs will likely result in increased costs to companies with meaningful exposure to the U.S. The higher prices would probably lead to a slowdown in demand and intensifying oversupply in the regional markets. Industrial sectors such as steel and auto could experience more margin strain as a result. Tariffs and oversupply are two structural changes that are key near-term risks for Korea's large companies. The transition to electric vehicles (EV) is another major shift that is proving hard to time. Many Korean companies made hefty investments, betting on its long-term growth potential. However, wide adoption is taking longer
