Seoul: Volatility in the foreign exchange (FX) market and the United States' tariff policies pose the biggest risks for South Korean exporters, the companies said in a recent survey released Wednesday.

According to Yonhap News Agency, the survey conducted by the Korea International Trade Association (KITA) involved 1,193 export firms. It revealed that 28.6 percent of these companies believe their business environment in 2026 will be similar to last year, while 31.1 percent anticipate improvements and 30.3 percent foresee worsened conditions.

More than 47 percent of the firms have set a higher sales target for 2026 compared to last year, and over 80 percent plan to maintain or increase investment in both domestic and international markets this year. When asked about potential threats to their business, 43.5 percent of companies cited FX volatility and 40.1 percent expressed concern over U.S. tariffs.

The survey also highlighted that companies are facing increased import prices for raw materials and pressure from foreign buyers to reduce prices due to the recent depreciation of the Korean won. Additionally, there is growing concern over the rise of Chinese competitors, with their competitiveness rated between 99.1 to 99.3 percent of South Korean firms.

In a similar survey conducted three years ago, these figures were between 95.8 to 97 percent. Notably, the proportion of companies rating Chinese competitors' competitiveness at 110 percent or more of their own more than doubled this year from 10 percent recorded in 2023, as reported by KITA.

By sector, Chinese firms are perceived to be more competitive in petroleum products, home appliances, and steel. However, South Korean businesses maintain an advantage in the semiconductor, medical equipment, and other advanced industries.

The survey also indicated that nearly half of Korean companies desire the government to focus on stabilizing the local currency to foster a more favorable export environment, while another 28 percent emphasized the importance of minimizing trade risks through negotiations with major economies.