[Morning Briefing] Trump: "Higher tariffs without market opening"... New York Stock Exchange ends strong

◆ Trump: "Tariffs will be lowered if market openings are agreed, otherwise much higher tariffs"

Donald Trump, President of the United States, stated on the 23rd (local time), "Tariffs will only be reduced for countries that agree to open their markets, and if they do not, much higher tariffs will be imposed." President Trump wrote this in a post on his social media platform, Truth Social, regarding the conclusion of the U.S.-Japan trade agreement the previous day, adding, "Japan opened its market to the U.S. for the first time in history." In another post, President Trump said, "If I can make major countries open their markets to the United States, I will always be willing to make concessions on tariff rates," and further explained, "Market opening is another great force of tariffs," insisting that, "Without it, it would be impossible to make countries open up." Ahead of the implementation of mutual tariffs on the 1st of next month, President Trump actively promoted the results of market opening while announcing trade agreements with Japan, the Philippines, and Indonesia the previous day.

◆ New York Stock Exchange closes higher on optimism over trade talks... S&P 500 hits record high

Optimism over progress in trade negotiations pushed the New York Stock Exchange higher on the 23rd (local time). On this day, the Dow Jones Industrial Average on the New York Stock Exchange closed at 45,010.29, up 507.85 points (1.14%) from the previous session. The S&P 500 index closed at 6,358.91, up 49.29 points (0.78%), and the Nasdaq index at 21,020.02, up 127.33 points (0.61%), each finishing higher than the previous session. News that the United States is finalizing trade agreements one after another with major trading partners has spurred risk appetite. President Donald Trump said on his social media account the previous day that "Japan will pay a 15% mutual tariff to the U.S." and announced the completion of the largest-ever trade agreement between the two countries. In addition, reports that the U.S. and the EU are nearing a basic trade agreement further fueled buying sentiment. By sector, all sectors except consumer staples and utilities closed higher. Healthcare rose more than 2%, and industries and energy also climbed more than 1%.

◆ Minister visiting the U.S.: "Will closely review U.S.-Japan agreement and respond... all-out government effort"

Ahead of the implementation of mutual tariffs in the U.S. on the 1st of next month (local time), Kim Jeong-gwan, Minister of Trade, Industry and Energy, who arrived in the United States on the 23rd, stated that he would closely review the U.S.-Japan trade agreement announced the previous day and engage in U.S.-Korea negotiations accordingly. Upon arriving in the U.S. via Dulles Airport near Washington, D.C. on this day, Minister Kim responded to reporters' questions about the U.S.-Japan agreement by saying, "It's not yet time to give an assessment. We're carefully examining things and considering how to respond." He added that the agreement "could serve as a reference and should also be compared to the ongoing U.S.-Korea negotiating draft." Responding to the suggestion that his visit to the U.S. could be seen as an 'all-court pressing' (all-out negotiation effort with the United States) at the government level, he agreed and said each relevant department would proceed with discussions with their respective U.S. counterparts. Regarding the purpose of this visit, Minister Kim said, "I'm here to negotiate tariffs with my counterparts as the tariff talks are being vigorously conducted," and added, "I will do my best. Please watch closely."

◆ "U.S.-EU near trade deal at 15% tariff... 'status quo' maintained"

The United States and the European Union (EU) are close to reaching a trade agreement that imposes a 15% tariff on imports from the EU, according to the British daily Financial Times (FT) on the 23rd (local time). According to three sources, this level of tariff is being considered to avoid the 30% tariff President Donald Trump announced would start on the 1st of next month. The U.S. and EU are also reportedly close to agreeing on tariff exemptions for certain items such as aircraft, spirits, and medical devices. The European Commission briefed member countries on these details after negotiations with the U.S. If a 15% tariff rate is agreed upon, it will be similar to the U.S.-Japan trade deal announced the previous day. Two sources said that, due to increased pressure following the U.S.-Japan trade agreement, the EU is reluctantly accepting the high U.S. tariff to avoid a trade war. Since April, EU products have been subject to an additional 10% tariff on top of the existing average 4.8% tariff in the United States.

◆ Hyundai Motor Company to announce Q2 earnings; performance expected to fall due to U.S. tariffs

Hyundai Motor Company, the top domestic automaker, is set to announce its Q2 earnings of the year on the 24th, amid the full impact of U.S. auto tariffs. According to the securities industry, Hyundai Motor Company's Q2 sales and operating profit estimates are ₩46.4776 trillion and ₩3.5711 trillion, respectively. Compared to the same period last year (sales of ₩45.0206 trillion and operating profit of ₩4.2791 trillion), this marks a 3.2% increase in sales but a 16.5% drop in operating profit. If these forecasts are realized, Hyundai will post a double-digit decline in operating profit for the first time in five years since Q3 2020. Back then, quality costs of over ₩2 trillion were reflected, leading to an operating deficit of about ₩300 billion. While sales increased, Hyundai’s operating profit declined, attributed to the impact of U.S. item-based tariff expenses. The difference in operating profit between Q2 last year and this year is about ₩700 billion, which the industry generally interprets as the cost of the 25% import auto tariff imposed by the U.S. since April.

◆ Russia-Ukraine 3rd talks end with no major outcome—agreement only on further prisoner exchange

The third high-level peace negotiations between Russia and Ukraine, held on the 23rd (local time), ended quickly without major results. As with the first and second meetings, only limited agreements such as prisoner exchanges were reached, with Russia expressing dissent and no progress made on Ukraine's demand for a leaders' summit. According to Reuters and RIA Novosti, the delegations of both countries met at Çırağan Palace in Istanbul, Türkiye around 8 p.m. and concluded shortly after 9 p.m. Aide Medinsky told the press after the meeting, "All humanitarian agreements discussed last time have been implemented." He said that with the release of 250 prisoners of war each at the Ukraine-Belarus border, a total of 1,200 prisoner exchanges had been completed. Furthermore, both countries agreed to exchange an additional 1,200 prisoners each on this day, with Russia proposing even more exchanges.

◆ Ongoing heatwave... Daytime highs up to 36°C

On Thursday the 24th, most regions nationwide will remain under heatwave alerts. According to the Korea Meteorological Administration, most areas are under heatwave warnings, with peak apparent temperatures reaching around 35°C in Gyeonggi inland, the east coast of Gangwon, southern mountain regions, Chungnam, and southern provinces, making it very hot. Other regions are also expected to see highs around 33°C. Morning lows will be 21–27°C, with daytime highs predicted at 32–36°C. Peak apparent temperatures will reach around 35°C in Gyeonggi inland, the east coast of Gangwon, southern mountains, Chungnam, and southern regions, and about 33°C elsewhere, resulting in very hot conditions. Tropical nights—where minimum temperatures stay above 25°C—will also occur in some areas, so caution against heat-related illnesses is advised. Fine dust concentrations are expected to remain at 'good' to 'normal' levels nationwide. However, in Daegu, lingering and domestic fine dust accumulated overnight will result in 'bad' levels in the morning.

Cha Eun-ji, Hankyung.com reporter, chachacha@hankyung.com