South Korea’s trade chief, Ahn Duk-geun, requested a waiver from US tariff measures during the APEC conference. However, there is no indication of how the request was received or any precedent of a complete exemption from US tariffs.

Allowing an exemption could lead other nations to seek similar relief, potentially complicating trade negotiations further. It raises questions globally about fairness and consistency in US trade policy.

International Trade Policy Conflict

This situation highlights a friction between individual country interests and the broader framework of international trade policy. While the request was formally made by Ahn, we have seen no official response, which suggests that either the matter is still under consideration or that the request was set aside. Given the lack of precedent, a waiver would mark a sharp departure from previous tactics used by Washington.

With every move from Washington carefully watched, even a gesture such as a waiver has the potential to introduce new tensions among long-standing trade partners. Other governments may perceive preferential treatment, prompting them to demand similar access or to retaliate by adjusting their own tariff structures. That risk alone may be enough for US trade officials to remain non-committal in the weeks ahead.

For us looking at pricing in the short-term, especially where derivatives based on trade-sensitive sectors come into play, there is now a wider corridor of uncertainty. The absence of confirmation or even a soft denial means we cannot discard potential rerouting of key trade flows. As such, hedging strategies that rely too heavily on stable or predictable trade terms could be exposed to sharp repricing.

Lee, South Korea’s minister for Trade at earlier summits, had hinted that semiconductor exports may be caught in this policy grey area. While he’s not directly referenced here, one can infer that high-value tech goods remain at the forefront of Seoul’s priorities. Should Washington maintain tariffs, those products might be subject to higher costs indefinitely. That’s not a matter of politics as much as it’s a pricing input for supply chain-linked options.

One helpful thing we can do now is to monitor bid-ask spreads in sectors tied to Asia-Pacific exports, especially where volatility has recently narrowed. A widening spread would signal re-pricing amid real uncertainty, particularly for those holding large notional value positions.

Monitoring And Adaptation Strategies

We also want to be cautious with exposure on long-dated contracts tied to trade metrics. Now that the potential for diplomatic escalation exists, we may encounter sudden policy shifts. That would especially affect contracts whose settlement prices depend on cross-border flows of physical goods. This is not about panic—rather, it’s about positioning with realism, recognising that moments like this don’t appear often and tend to resolve either toward market openness or toward greater restriction.

In our modelling, the most prudent adjustments at this point include tightening hedge ratios and delaying directional bets on export-dependent equities. Given that some of the possible policy decisions could emerge over weekends, when markets are closed, we position accordingly. Overnight gaps have increased in frequency across risk proxy pairs, a fact which we include in forward volatility forecasts. Markets have not fully priced these risks in at present.

So while the dialogue between capitals continues, we shouldn’t act as if terms have already changed—or are guaranteed to change. From a trader’s perspective, waiting for clarity without losing exposure discipline will make all the difference in the next few weeks.

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