South Korea’s economy contracted in the first quarter after large-scale wildfires and political turmoil over its president’s impeachment suppressed consumer sentiment and business activities, the Wall Street Journal reported. The downbeat start to the year comes as a global trade war sparked by President Trump’s sweeping tariffs has darkened the outlook for the export-driven economy, likely bolstering the case for more monetary and fiscal stimulus.

The effects of President Trump’s new tariffs are starting to be felt across the world, preliminary South Korean trade data suggest, as Seoul prepares to begin negotiations with Washington, D.C., the Wall Street Journal reported. Exports from Asia’s fourth-largest economy fell 5.2% from a year earlier in the first 20 days of April, according to data from South Korea’s customs office released Monday ahead of full monthly trade figures due next week. Imports plunged 12%, leading to a trade deficit, the preliminary numbers showed.

South Korea on Wednesday announced emergency support measures for its auto sector, seeking to reduce the blow of U.S. President Donald Trump's tariffs on a sector that has seen years of sharply rising exports to the United States, Reuters reported. The measures include financial support for the auto industry as well as tax cuts and subsidies to boost domestic demand, while the government also vowed efforts to negotiate with the U.S. and help expand markets. Trump has announced a 25% tariff on imported cars and light trucks starting on Thursday.

As MG Non-Life Insurance was declared insolvent this week, its ripple effects could now adversely influence the pre-arranged sale of KDB Life to JC Partners, a major shareholder of MG Non-Life, the Korea Times reported. During its regular meeting on Wednesday, the Financial Services Commission (FSC) decided to designate MG Non-Life as an insolvent financial institution, given that its debt exceeded its capital by 113.9 billion won ($92.9 million).

South Korea’s exports grew at a stronger-than-expected pace in March, showing signs of resilience as concerns about U.S. tariffs cast uncertainty over the outlook for trade, the Wall Street Journal reported. President Trump has set an April 2 deadline to unveil so-called reciprocal duties, which aim to equalize U.S. tariffs with those charged by other countries. That comes on top of plans Trump announced last week to impose a separate 25% tariff on cars and auto parts. As one of the top exporters of cars to the U.S., South Korea faces a major drag if the auto levy goes into effect.

Japan, South Korea and China agreed on Sunday to continue trilateral economic and trade cooperation to address “emerging challenges,” a partnership that has become more crucial than ever as the U.S. trade war shatters the global order. Trade minister Yoji Muto, his South Korean counterpart, Ahn Duk-geun, and Chinese Commerce Minister Wang Wentao met in Seoul for the first trilateral meeting among the three countries’ trade ministers in over five years, the Japan Times reported.

Nearly 12% of South Korean firms became insolvent last year due to the downturn in construction and real estate, marking the highest level since 2019. These companies, burdened with more debt than assets, face complete capital erosion and financial instability, the Chosun Daily reported. According to the Federation of Korean Industries (FKI) on March 23, about 4,466 companies, or 11.9% of all 37,510 externally audited companies (excluding financial firms), are expected to be completely insolvent.

South Korean authorities are ramping up efforts to regulate the crypto market, focusing on exchanges believed to be operating without proper licensing, CoinMarketCap.com reported. The Financial Intelligence Unit (FIU) of the Financial Services Commission is investigating several platforms, including KuCoin, BitMEX, CoinW, Bitunix, and KCEX, for allegedly providing services to South Korean users without registering as Virtual Asset Service Providers (VASPs).