Korean Shoppers Face $145 Per Person Hit from Tariffs on Holiday Gifts

If U.S. tariff policies continue, South Korean consumers could bear an average additional cost of ₩190,000 (approximately $145 USD) per person for holiday gift purchases, according to a new analysis. Online lending platform LendingTree released findings applying U.S. tariff rates to last year's holiday gift spending data, highlighting the direct impact of U.S. trade policy changes on Korean consumer spending.

LendingTree's analysis estimates that the total additional cost borne by consumers and retailers due to tariffs could reach approximately ₩59 trillion (approximately $45 billion USD). Of this, consumers are expected to shoulder around ₩41 trillion (approximately $31 billion USD), representing about 70% of the total. Retailers are projected to absorb the remaining ₩17 trillion (approximately $13 billion USD). LendingTree emphasized the significantly larger burden on consumers compared to retailers.

Specifically, LendingTree's itemized cost increase analysis anticipates the biggest impact on electronics. The analysis projects an average cost increase of approximately ₩266,000 (approximately $200 USD) per person in the electronics sector, a considerably higher figure compared to other categories. Given the high demand for electronics as holiday gifts, tariff-induced price hikes could further dampen consumer sentiment.

LendingTree's analysis illustrates the impact of tariff increases on consumer purchasing power. If consumer spending declines due to higher tariffs, it could negatively affect the domestic economy. The holiday season is a period of concentrated spending, making a careful analysis of tariff impacts essential.

The significance of LendingTree's analysis lies in quantifying the direct impact of U.S. tariff policies on Korean consumers. By applying specific U.S. tariff rate changes to concrete data, LendingTree provided an estimate of the impact at a level readily understandable by consumers.

Some argue that strengthening the competitiveness of domestic companies is essential to counter tariff increases. This can be achieved by enhancing product competitiveness through technological development and quality improvement.

According to LendingTree's analysis, adopting sensible spending habits is crucial for consumers to minimize the burden of increased tariffs. It is important to be sensitive to price fluctuations and make purchasing decisions based on careful price comparisons. Furthermore, reducing unnecessary expenses and practicing planned spending can help overcome financial difficulties.

Consumers can respond to price increases caused by tariffs in various ways, such as considering alternative products or reducing consumption. Purchasing domestic products instead of importing them, or utilizing secondhand products, can also be viable options. Minimizing the impact of tariff increases through rational consumption is essential.

LendingTree's analysis highlights the importance of providing consumers with information for making informed purchasing decisions. By carefully making their purchase choices based on various information, consumers can reduce the burden of tariff increases. Companies should transparently disclose product and pricing information to assist consumers in making rational choices.

The analysis indicates that the impact of U.S. tariff policies on the Korean economy cannot be overlooked. As LendingTree's analysis demonstrates, tariff increases lead to increased consumer burdens, which dampen consumer sentiment and negatively affect domestic economic growth. Therefore, the government must closely monitor changes in U.S. tariff policies and prepare necessary response measures.

Minimizing the consumer burden from tariff increases requires concerted efforts from the government, businesses, and consumers. The government should pursue diplomatic efforts to ease tariff barriers, and domestic companies should strengthen their competitiveness through technological development and quality improvement. Consumers must practice rational consumption habits to overcome economic difficulties and contribute to the revitalization of the domestic economy.