US Treasury: "No trade deal with Korea until National Assembly approval"…Samsung Electronics earnings release [Morning Briefing]

◆ US Treasury Secretary: "No trade deal until Korea’s National Assembly approves"

US Treasury Secretary Scott Bessent said in a CNBC interview on the 28th (local time) that “because Korea’s National Assembly has not passed the trade agreement, there will be no trade deal with Korea until it is approved.” He added that “(the Trump administration’s signal is) to sign the trade agreement.” Asked, “Does that mean they (Korea) will face a 25% tariff until it’s approved (by Korea’s legislature)?”, he avoided a clear answer, saying, “I think this helps move things forward.” President Donald Trump said on the 26th, “Because Korea’s legislature has not legislated our historic trade deal, we are raising all reciprocal tariffs on automobiles, lumber, pharmaceuticals and everything else from 15% to 25%.” Steps to implement the tariff hike—such as an executive order or publication in the Federal Register—have not yet been taken.

◆ Samsung Electronics to announce detailed Q4 and full-year results today

Samsung Electronics will announce today, the 29th, its finalized results for the fourth quarter and full year of last year, along with detailed figures by business division. According to preliminary results disclosed on the 8th, consolidated fourth-quarter revenue and operating profit came to KRW 93 trillion and KRW 20 trillion, respectively. Brokerages estimated that fourth-quarter operating profit at the Device Solutions (DS) division, which oversees the semiconductor business, exceeded KRW 16 trillion, with the memory business alone likely surpassing KRW 17 trillion. Non-memory units such as System LSI and foundry saw higher utilization rates, but profitability improved only slowly; they were estimated to have posted a loss of around KRW 1 trillion. The Device eXperience (DX) division, which handles set businesses, is expected to have remained weak amid sluggish downstream demand and cost burdens from memory semiconductors. Operating profit at the Mobile eXperience (MX) unit is analyzed at around KRW 1.5 trillion in the fourth quarter, while the DA and VD units responsible for home appliances and TVs are estimated to have posted a slight loss amid sluggish sales.

◆ US holds rates at 3.5–3.75%…Korea–US rate gap stays at 1.25 percentage points

The US central bank, the Federal Reserve (Fed), held its benchmark rate at 3.5–3.75% on the 28th (local time). This pauses a run of three consecutive 0.25 percentage-point cuts in September, October and December last year. The move is seen as a bid to moderate the pace, judging that inflation risks stemming from President Donald Trump’s tariff policies have not dissipated. The Fed explained the decision, saying, “Job gains remain low, and the unemployment rate shows signs of stabilizing. Inflation remains somewhat elevated.” With the decision, the interest-rate gap between Korea (2.50%) and the US will remain at 1.25 percentage points at the upper bound. The Bank of Korea on the 15th held its base rate at 2.5% for a fifth consecutive meeting at its Monetary Policy Board meeting.

◆ New York stocks end mixed; S&P 500 even breaks above 7,000 intraday

US stocks closed mixed. Ahead of earnings from major Big Tech firms, strength in tech and semiconductor shares pushed the Standard & Poor’s (S&P) 500 above 7,000 for the first time ever. However, as markets digested the Federal Open Market Committee (FOMC) outcome and valuation pressures grew, equities retreated back toward flat territory. On the 28th in New York, the Dow Jones Industrial Average closed up 0.02% at 49,015.6. The S&P 500 fell 0.01% to 6,978.03, while the Nasdaq Composite rose 0.17% to 23,857.45. The S&P 500 climbed as high as 7,002.28 intraday. Strong results from key semiconductor companies provided a tailwind for the market.

◆ National Assembly plenary session…semiconductor special bill and bill to transfer chair’s authority during filibusters expected to pass

Korea’s National Assembly will hold a plenary session today, the 29th, and plans to pass around 90 non-contentious livelihood-related bills. The agenda includes the “Special Bill on Strengthening Competitiveness and Supporting the Semiconductor Industry” (the semiconductor special bill), which stipulates tangible support measures related to the semiconductor industry, a national strategic industry. The ruling and opposition parties are also set to pass an amendment to the National Assembly Act that would allow the Assembly Speaker’s authority to preside to be transferred to standing committee chairs and others if a filibuster (a lawful obstruction of proceedings through unlimited debate) takes place.

Choi Soo-jin, Hankyung.com reporter naive@hankyung.com