[Morning Briefing] Trump's Auto Tariffs, New York Stock Market Plunge... Dry Weather Leads to Wildfires

◆ New York Stock Market Plunges for Second Day Due to Trump's Auto Tariffs Without Negotiations

The three major indices of the New York Stock Exchange fell for the second consecutive day. On the 27th local time, the Dow Jones Industrial Average, which gathers blue chips, closed at 42,299.70, down 0.37% from the previous trading day. The S&P 500 index, a benchmark for large-cap stocks, fell 0.33% to 5,693.31. The tech-heavy Nasdaq index fell 0.53% to 17,804.03. It is evaluated that investor sentiment continues to decline as President Donald Trump imposes a 25% tariff on imported cars. In particular, this auto tariff is not for negotiation but a measure for U.S. manufacturing reshoring, so there is little possibility of tariff reduction or exemption for specific countries. Like steel and aluminum, there are no separate exceptions. Although tariffs on parts subject to the United States-Mexico-Canada Agreement (USMCA) have been temporarily deferred, they are not expected to be permanently exempted. On Wall Street, there was a strong view that President Trump's tariffs were for negotiation. However, the view that it is for negotiation is gradually decreasing. Edison Yu, an analyst at Deutsche Bank, observed, "Even if tariffs are partially modified or exceptions are made, it will be difficult for the auto industry to return to its previous state over the next four years."

◆ 'Monster Wildfire' Spreads at Typhoon Speed, Devastates Mountains and Coasts in a Week

The wildfires that simultaneously started in two places, Gyeongbuk and Gyeongnam, have been spreading indiscriminately in all directions for a week, causing unprecedented damage. The Ulsan wildfire, which ignited at the same time as Gyeongbuk, also recorded the largest damage area in the region and was barely extinguished after six days. However, the wildfire in the Yeongnam region, centered on parts of Gyeongbuk and Gyeongnam, spread to places tens of kilometers away from the ignition site due to the initial failure of the forest authorities to extinguish it. The wildfire, which once moved at a record speed of 8.2 km per hour, affected not only inland areas such as Andong, Cheongsong, and Yeongyang but also the east coast area 80 km away from the initial ignition site. As the wildfire continued, 'goblin fire,' which was rarely seen before, was frequently witnessed in areas densely populated with pine trees, flying in all directions with strong winds. Through this process, the Yeongnam wildfire burned parts of Jirisan National Park and Juwangsan National Park and approached 2-3 km in front of the UNESCO World Heritage sites Andong Hahoe Village and Byeongsan Seowon. The forest authorities, which have issued a level 3 wildfire response, are mobilizing a large number of firefighting helicopters, personnel, and equipment every day to focus on extinguishing the main fire and establishing firebreaks around major national facilities and residential areas. However, with strong winds, extremely dry weather, and unfavorable terrain for firefighting, the work to extinguish the fire is progressing slowly. As of noon on the 24th, the extinguishing rate of the Uiseong and Andong wildfires, which had risen to 71%, fell to the low 60% range in three days. The extinguishing rate of the Yeongdeok wildfire, where multiple fatalities occurred, remains at 55%, and the Yeongyang wildfire at 60%. According to Gyeongbuk Province, 23 residents have died in five places, including Andong, Cheongsong, Yeongyang, Yeongdeok, and Uiseong. In areas such as Andong, Uiseong, Cheongsong, Yeongyang, and Yeongdeok in Gyeongbuk, 33,089 residents, and in areas such as Sancheong and Hadong in Gyeongnam, 1,622 residents have evacuated to indoor gyms.

◆ Moon Hyung-bae and Lee Mi-sun's Retirement in 3 Weeks, Yoon's Impeachment Judgment as Early as the 4th

With the retirement of Acting Chief Justice Moon Hyung-bae and Justice Lee Mi-sun of the Constitutional Court approaching in three weeks, there is speculation that the impeachment judgment of President Yoon Seok-yeol is imminent. According to the legal community today, Acting Chief Justice Moon and Justice Lee were appointed on April 19, 2019, and will retire on the 18th of next month after completing their six-year term. In a situation where Acting President and Prime Minister Han Deok-soo is not appointing Justice Ma Eun-hyeok, if the two justices retire, the Constitutional Court will become a 'six-member system.' In this case, although it is not legally impossible to make a ruling, there is bound to be controversy over the legitimacy of future decisions, so it is expected that the Constitutional Court will somehow conclude the case before then. According to the Constitutional Court Act, a decision to remove requires the consent of six or more justices. The Constitutional Court has concluded the hearings on the two impeachment trials of President Yoon and Justice Minister Park Sung-jae and is only awaiting the ruling. General rulings are usually made on Thursdays. Since the Constitutional Court already held a regular ruling the day before, it seems unlikely that a general case ruling will be made on April 3. April 10 or 17 is possible, but since the 17th is the day before retirement, the 10th is considered more likely. The legal community predicts that the impeachment judgment of President Yoon will be announced between April 3-4 or 14-16, after the April 2 by-elections. There is also a possibility of announcing it on April 11, along with the general case ruling.

◆ Vice Minister of Industry Inspects Auto Production and Export Sites

Park Sung-taek, the 1st Vice Minister of Trade, Industry and Energy, visited Pyeongtaek Port and Kia's Gwangmyeong plant in Gyeonggi Province yesterday to inspect the situation of automobile production and export. This visit was arranged to check the expected damage situation in the industry amid growing market concerns following the announcement of the U.S.'s plan to impose auto tariffs. At Pyeongtaek Port, officials including Kim Tae-woo, Vice President of Hyundai Glovis, attended, and at Kia's Gwangmyeong plant, Kia President Choi Joon-young and representatives of partner companies, including Myunghwa Industry, attended. Industry officials said, "Regarding the U.S. tariff measures, please negotiate with the U.S. side so that we do not receive unfavorable treatment compared to competing countries," and "In particular, we requested various support such as emergency management stabilization funds and market diversification for parts companies facing significant management difficulties," the Ministry of Industry reported. President Donald Trump announced plans to impose a 25% tariff on imported cars, including those from Korea, starting April 3. Last year, Korea's automobile exports to the U.S. amounted to $34.744 billion, accounting for nearly half (49.1%) of Korea's total automobile exports ($70.789 billion).

◆ 'Chilly Again,' Morning Temperatures Drop by 10 Degrees

Today, Friday, the temperature nationwide will be lower than usual, and the wind will be strong, making it chilly. As cold air from the northwest moves south, morning temperatures in most areas will drop by about 10 degrees compared to yesterday. The elderly and children with weak immune systems should avoid outdoor activities and take care of their health. As of 5 a.m., the temperatures in major areas were 4.2 degrees in Seoul, 4.0 degrees in Incheon, 4.7 degrees in Suwon, 6.9 degrees in Chuncheon, 6.2 degrees in Gangneung, 5.5 degrees in Cheongju, 5.6 degrees in Daejeon, 5.3 degrees in Jeonju, 5.5 degrees in Gwangju, 7.6 degrees in Jeju, 9.6 degrees in Daegu, 10.8 degrees in Busan, 8.6 degrees in Ulsan, and 10.8 degrees in Changwon. The highest daytime temperatures are forecasted to be between 8 and 15 degrees. The nation will be mostly clear, but Gangwon Yeongdong, Gyeongsang Province's east coast, and Jeju Island will be mostly cloudy. There will be rain or snow in the afternoon in the mountainous areas of Gangwon, the east coast, the northeastern mountains of Gyeongbuk, and the east coast of Gyeongbuk. The expected precipitation is around 5 mm in the Gangwon east coast and mountains, less than 5 mm in the Gyeongbuk east coast and northeastern mountains, and the expected snowfall is 1-5 cm in the Gangwon mountains. The fine dust concentration is expected to be 'good' to 'moderate' in all areas.

Kim So-yeon, Hankyung.com Reporter sue123@hankyung.com