Donald Trump’s imposition of a 25% tariff on foreign steel may have caused alarm among South Korean officials, but it has been music to the ears of one sector of the country’s export-led economy: K-pop.
Investors have ploughed money into the industry, which is now being seen as a “safe haven” from Trump’s trade war with some of his country’s closest partners.
As government officials warned of the potentially negative impact of the tariffs, given South Korea is the US’s fourth-biggest supplier of steel, shares in South Korea’s four major entertainment groups soared to their highest levels for a year.
JYP Entertainment and Hybe, the agencies behind some of the most recognisable names in K-pop, saw their respective stock prices rise by 6.09% and 3.15% on Tuesday, according to the Korea Exchange, marking a 52-week high for both companies.
Shares in two other industry giants, SM Entertainment and YG Entertainment, came close to reaching yearly highs, according to the Korea Times.
Market analysts say K-pop has avoided entanglement in Trump’s burgeoning trade war, which primarily targets goods while leaving “soft power” sectors such as entertainment largely unscathed.
The aggressive purchase of entertainment stocks has also been driven by expectations that K-pop is about to enter another boom period. BTS, whose members have been performing compulsory military service, are due to resume their music careers this summer, while the girl band Blackpink will start a world tour in the second half of the year.
“The entertainment sector stands to gain significantly from the return of major intellectual properties like BTS and Blackpink, as well as minimal impact from US tariffs,” Shinhan Investment and Securities researcher Ji In-hae told the Korea Times.
Signs of a revival in cultural ties between South Korea and China will also benefit the Hallyu wave of Korean cultural content.
China was responsible for about a fifth of South Korean entertainment companies’ revenue in 2016, according to the Korea Times, but sales have stagnated since Beijing imposed restrictions on Korean cultural imports the following year.
That could be about to change, thanks to a surge in the merchandise market in China and the decision last year to allow South Koreans to enter China without visas – a move that is expected to lead to more concerts and music sales.
Along with film and TV dramas, cuisine and cosmetics, K-pop is one of South Korea’s most successful cultural exports, earning the country almost $900m in 2023 – an increase of more than a third on the previous year – according to the Korea Culture and Tourism Institute.
Businesses in other sectors are nervous, however, about the possibility Trump will expand his tariff regime to include vehicles and semiconductors, which together account for more than 40% of South Korea’s exports to the US.
South Korea’s acting president, Choi Sang-mok, is to hold a meeting next week to discuss his administration’s response to Trump’s tariff on steel and aluminium, including possible countermeasures.
“Uncertainty in the global trade environment is increasing,” Choi said during a meeting with ministers this week, according to the Yonhap news agency.
