Trump’s 25% Steel Tariffs Turn Out to Be a “Boon” for K-Pop Entertainment Industry... Major Companies See Record 52-Week Highs in Stock Prices

As U.S. President Donald Trump imposed 25% tariffs on foreign steel earlier this month, sparking skepticism about South Korea’s economy, the K-Pop entertainment sector has instead attracted heightened investor interest. There are concerns that Trump’s tariff policy will severely impact South Korea’s manufacturing sector, given that the country is the fourth-largest steel supplier to the United States. However, the K-Pop entertainment industry is in a favorable position to avoid direct effects from these tariffs. The stock prices of South Korea’s four major K-Pop agencies—SM Entertainment, YG Entertainment, HYBE, and JYP Entertainment—have all reached new 52-week highs in recent days. JYP Entertainment and HYBE reached their highest levels in 52 weeks on Tuesday, with shares rising by 6.09% and 3.15%, respectively, while SM Entertainment and YG Entertainment also recorded prices close to their annual peaks. Market analysts provided an explanation for why K-Pop has remained unaffected by Trump’s trade war. Tariffs primarily target the import and export of goods and do not affect sectors related to “soft power” such as entertainment. In other words, K-Pop bands can function without steel. Ji In-hae, a researcher at Shinhan Investment & Securities, told The Korea Times, “The entertainment sector will benefit significantly from the return of major intellectual property assets like BTS and BLACKPINK, along with minimal impact from U.S. tariffs.” Investors’ aggressive stock purchases are also driven by expectations of an upcoming boom in the K-Pop industry. Members of BTS are set to complete their military service and resume musical activities this summer, while BLACKPINK will launch a world tour in the second half of the year. The revival of cultural exchanges between South Korea and China is expected to have a positive impact as well. China accounted for about one-fifth of South Korean entertainment companies’ revenue in 2016, but sales stalled after Beijing imposed restrictions on K-pop culture imports in 2017. The decision last year to allow South Koreans to enter China without visas is expected to boost cultural exchanges, and the expansion of China’s merchandise market is also a positive sign. K-Pop, along with movies, TV dramas, food, and cosmetics, is one of South Korea’s most successful cultural exports. According to the Korea Cultural Tourism Research Institute, K-Pop generated approximately $900 million in revenue for South Korea in 2023, representing more than a third increase from the previous year. Meanwhile, companies in other industries are worried about the possibility that Trump will extend tariff policies to sectors such as automobiles. In South Korea’s export-driven economy, manufacturing products like semiconductors and cars face the risk of being hit hard by U.S. tariffs.