Seoul: South Korea may face a substantial decline in exports of key products in the second half of the year if U.S. President Donald Trump's proposed reciprocal tariff policy goes into effect as planned, a trade expert predicted Tuesday.

According to Yonhap News Agency, "If the tariff policy of Trump's second term is implemented in earnest, we could see South Korea's exports to the United States contract substantially (in the second half)," said Chang Sang-sik, head of the Korea International Trade Association's International Trade and Commerce Research Center. Chang made the remarks at a Seoul forum hosted by the Federation of Korean Industries.

He predicted that exports in the automobile and steel sectors could record declines of 7.1 percent and 7.2 percent, respectively, in the July-December period, while auto parts and machinery industries could also see 6.5 percent and 3.8 percent declines, respectively, due to U.S. tariffs.

The projection was made in light of Trump's unveiling of a letter addressed to South Korean President Lee Jae Myung earlier in the day, saying that the U.S. will start imposing 25 percent tariffs on all South Korean products on Aug. 1.

Chang warned that high U.S. tariffs targeting Korean steel, automobiles, and components could deal widespread blows to local industries, and urged companies to explore proactive strategies, such as shifting overseas production bases or adjusting export prices.

Chang also called on the government and industries to move away from their heavy reliance on the U.S. and Chinese markets. "South Korea needs to diversify its export destinations toward the European Union, the Association of Southeast Asian Nations, and India, among other regions, while accelerating its transition to high-tech industries, including artificial intelligence (AI) semiconductors, solid-state batteries, electric vehicles (EVs), and hydrogen-powered cars," Chang said.