K-Pop Rises as “Safe Asset” Amid Trump’s Tariff Policies; Stock Prices of Top 4 Agencies Hit 52-Week Highs

U.S. President Donald Trump’s imposition of a 25% tariff on imported steel has led to an unexpected beneficiary industry: K-pop. The stock prices of South Korea’s four major entertainment groups—SM Entertainment, YG Entertainment, JYP Entertainment, and HYBE—reached 52-week highs in recent days. This is because investors view the K-pop industry as a “safe asset” amid Trump’s trade disputes. While tariffs primarily affect tangible goods such as steel, semiconductors, and automobiles, intangible cultural industries like entertainment are not impacted. Ji In-hae, a researcher at Shinhan Investment Securities, stated, “The entertainment sector will benefit significantly from the return of key intellectual properties like BTS and BLACKPINK, along with minimal effects from U.S. tariffs.” Aggressive buying by institutional investors drove up stock prices. So far this year, institutions have made net purchases of HYBE shares worth 72.1 billion won, SM Entertainment shares worth 32.8 billion won, JYP Entertainment shares worth 29.4 billion won, and YG Entertainment shares worth 2.1 billion won. According to the Korea Exchange, JYP Entertainment and HYBE saw their stock prices rise by 6.09% and 3.15% respectively on Tuesday, reaching 52-week highs, while SM Entertainment and YG Entertainment also approached their annual highs. Optimistic outlooks regarding the future of the K-pop industry further fueled investor confidence. BTS is set to resume full activities starting this summer after its members complete military service, and BLACKPINK will launch a world tour in the second half of the year. These developments are expected to increase fan demand and improve earnings for entertainment companies. The cultural influence of K-pop is also a critical factor. According to the Korea Culture and Tourism Institute, K-pop generated $900 million (approximately 126 billion won) in 2023 alone, a figure that represents more than a third increase from the previous year. With South Korea’s economy heavily dependent on exports, K-pop holds strategic value as one of the few cultural exports unaffected by tariffs. Additionally, the revival of cultural exchanges between South Korea and China is acting as a positive signal. China’s decision to grant visa-free entry to South Koreans last year suggests an increase in concert performances and music sales. Since China accounted for about one-fifth of South Korean entertainment companies’ revenues in 2016, the resurgence of the Chinese market is expected to become a new driving force for the growth of the K-pop industry.