Is S Korea Less Appealing to the U.S.?
Wisconsin, USA –January 4, 2012 – It is a thought that weighs heavy on the minds of exporters in S Korea; will the currency volatility cause the U.S. to buy less products and cause further damage to its economy? After all, the inflation is making it more expensive for the U.S. to import goods. If it can find similar or the same goods elsewhere for less, could the business be taken elsewhere? As much as we love the LG, Samsung, Hyundai, Kia, and other products, we could easily find them elsewhere or start purchasing the ‘U.S. brands’ such as the Vizio for electronics –which is increasing in popularity.
Although the economy was rather steady over a year ago, Korea has lost control of the value of its won in terms of Euro and U.S. dollar; as much of a concern as this is for the rest of the world who makes purchases from S Korea, it is also a concern for the S Koreans. President Lee Myung-bak noted that he will try to control inflation for his local people; however, will this also control the costs of exports? Could Korean companies export for the lower price that they did last year or at least maintain a steady price?
If you look at the company such as Vizio –U.S. brand – it sells its electronics such as HDTVs for lower or comparable prices to LG and Samsung; employees as stores such as Walmart would say that it sells just as well as the other TVs and customers do not come back with problems –the quality must also be just as good as LG and Samsung. But what does this mean for S Korea? Will its products slowly be less available in the U.S. so Americans reach out for other products? Can S Korea bounce back and get its currency to be less volatile?
As much as Americans want Korean currency to get under control, it does not want it to manipulate it in order to maintain competitiveness in the world market. After all, its people could suffer do to direct control of currency value. If the U.S. Treasury suspects that this is occurring, it contacts the International Monetary Fund (IMF), which is responsible for handling the matter. Yet, this appears unreliable since China is an obvious manipulator of currency, but it has not been contacted about this matter.
As an American, I am concerned about the volatility of the S Korean Won; if Korea cannot get it under control, I cannot say that American businesses will not import from elsewhere. I would rather get my products from S Korea since my favorite brands are LG and Samsung; however, I cannot influence anyone in this matter.