KUALA LUMPUR, Jan 28 (Bernama) -- Bursa Malaysia snapped its five-day winning streak to close lower on Wednesday, as investors took profit following a cumulative gain of 4.25 per cent over the past five sessions, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 14.76 points or 0.83 per cent to 1,756.49 from Tuesday’s close of 1,771.25. The market bellwether opened 1.46 points lower at 1,769.79, marking the day’s high, and hit a low of 1,750.05 during the mid-afternoon session. Market breadth was negative with losers trouncing gainers 876 to 384, while 525 counters were unchanged, 964 untraded and 94 suspended. Turnover improved to 3.65 billion units worth RM4.41 billion from Tuesday's 3.58 billion units worth RM4.46 billion.
What happened
US President Donald Trump threatened to raise tariffs on South Korean goods to 25%, accusing Seoul’s legislature of failing to formalise a trade deal reached last year. The higher tariffs would apply to autos, pharmaceuticals, lumber and other goods, up from the current 15% levy.
The warning was issued via social media and follows delays in South Korea’s parliament passing a “special law on strategic investment with the US”, which would legally underpin Seoul’s investment commitments under the bilateral deal.
Why this matters
South Korea is highly exposed to the US market, with America accounting for over 17% of total exports (US$122.9 billion) last year. Any tariff hike would directly affect major exporters such as Hyundai Motor, which shipped 1.1 million vehicles to the US in 2024.
While Trump has often walked back tariff threats, Bloomberg data show about 27% of such threats since late 2024 were fully implemented, keeping markets on edge.
Market reaction
The Korean won weakened as much as 0.7% before stabilising
Kospi briefly fell 1.2%, then rebounded, underscoring investor belief that this may be headline-driven volatility rather than a structural shock
Bond futures edged higher on safe-haven demand
Despite the tariff scare, South Korea’s equity market remains strong, with the Kospi up over 95% in the past 12 months, driven largely by AI-linked semiconductor demand.
Political and policy backdrop
South Korean officials said they have not received formal notice from the US and are seeking urgent dialogue. Finance Minister Koo Yun Cheol said delays reflect procedural timelines rather than deliberate stalling, while industry leaders plan talks with US Commerce Secretary Howard Lutnick.
Meanwhile, Washington has also flagged concerns over South Korea’s digital regulations, particularly scrutiny of US-linked tech firms following a data breach at Coupang, adding another layer of friction.
Bottom line for investors
Tariff risk has resurfaced, but history suggests implementation risk is lower than headline noise implies
Korea’s exporters remain competitive, with supply-chain flexibility limiting long-term damage
Any near-term market pullback is likely sentiment-driven, not a deterioration in fundamentals
As one Korean fund manager put it, swift legislative progress could see tariffs lowered again, keeping the broader impact contained unless geopolitical tensions escalate further.
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