'Trump Tariffs' Lead to Weakness in U.S. Service Sector...Rain Expected Nationwide [Morning Briefing]

◆Kim Keon-hee Appears Before Special Prosecutor—A First in Constitutional History

Kim Keon-hee, wife of former President Yoon Seok-yeol, will appear as a suspect at 10 a.m. on the 6th before the special investigation team set up at KT Gwanghwamun Building West in Jongno-gu, Seoul. Mrs. Kim, summoned by Min Jung-gi's special prosecutor team, is scheduled to answer reporters’ questions as she passes the media line set up in front of the building’s main entrance. This marks the first time in constitutional history that a current or former president’s spouse has appeared publicly as a suspect before law enforcement. Mrs. Kim is accused of participating as a 'money source' (錢主) in the Deutsche Motors stock manipulation case that occurred between 2009 and 2012. Nine people, including former Deutsche Motors chairman Kwon Oh-soo and former Black Pearl Invest CEO Lee Jong-ho, were indicted over the case, and all were convicted, with the Supreme Court upholding their guilty verdicts. In addition, there are 16 more allegations against Mrs. Kim under the special prosecutor law. Therefore, she may be summoned several more times in the future. Mrs. Kim’s side has stated that she intends to cooperate fully with the investigation.

◆Heavy Rain in Many Areas...Up to 70mm Per Hour Downpours Possible

On Wednesday the 6th, most of the country will be generally cloudy with rain. The rain, having started this day, is expected to continue through the next day in most regions. Over two days, expected rainfall is 30–100mm in the Seoul metropolitan area and inland/mountainous Gangwon, 30–80mm in Chungcheong, Jeolla, and Gyeongsang regions (excluding Ulleungdo/Dokdo), 10–40mm along Gangwon’s east coast, and 5–40mm over Ulleungdo and Dokdo. Jeju Island is forecast to receive 30–80mm of rain through the 8th. Some areas in the Seoul metropolitan area and Gangwon may receive more than 150mm, and parts of Jeolla could see over 120mm of rain. In some places, downpours of up to 70mm per hour are expected. The Korea Meteorological Administration has advised caution: as heavy rain may cause river levels to rise rapidly in a short time, people should avoid riverside walking trails, underpasses, and should be vigilant regarding flooding in low-lying areas. As rain falls, heat wave advisories may gradually be lifted or eased in some regions, but with continued high humidity and temperatures, the maximum perceived temperature will remain above 31℃ for the time being.

◆U.S. Service Sector Weakens Due to 'Trump Tariffs'

Amid increased economic uncertainty wrought by the tariff policies of the Donald Trump administration, the U.S. service sector has been showing weakness. The Institute for Supply Management reported on the 5th (local time) that the U.S. service sector Purchasing Managers’ Index (PMI) for July stood at 50.1, dropping 0.7 points from the previous month. This figure also fell short of the 51.1 expert forecast compiled by Dow Jones. This reflects rising concerns that tariff policies could trigger stagflation, especially as employment conditions have clearly deteriorated. The PMI is an economic indicator calculated through surveys of executives in charge of purchasing and supply, covering new orders, inventories, employment conditions, and the like, to assess economic trends. A number above 50 signals expansion, and below 50 indicates contraction. Since the service sector accounts for over two-thirds of the U.S. economy, a weakened outlook here darkens prospects for the broader U.S. economy. July’s employment index fell 0.8 points to 46.4, showing heightened contraction in service sector jobs.

◆New York Stock Market Closes Lower as Tariff Fallout Hits Services

The New York Stock Exchange ended lower, with all three major stock indexes falling amid weakened investor sentiment following reports that tariffs have impacted the U.S. service sector. On the 5th (Eastern time), the Dow Jones Industrial Average closed at 44,111.74, down 0.14% from the previous session. The S&P 500 index dropped 0.49% to 6,299.19, and the Nasdaq Composite fell 0.65% to 20,916.55. Scott Anderson, Chief U.S. Economist at BMO Capital Markets, said, “The July ISM service report was disappointing and terrible,” adding, “The impact of stagflation seems to be rattling the service sector on a greater scale than previously expected.”

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