The surprising victory of Republican candidate Donald Trump over his Democratic rival Hillary Clinton in the United States presidential election will likely lead to a “perfect storm” for the already fragile Korean economy, Korean economists warned.

Local market experts and scholars raised concerns that the Korean economy that has been already struggling from falling exports, weak consumer spending and shrinking investment and employment would fall into further uncertainty under the new leadership of Trump who has not been shy about revealing his nationalistic and protectionist views on the global trade front.

Throughout his presidential campaign, Trump, who will succeed President Obama as the 45th U.S. President in January, set forth the so-called “America First” policy as his main election promise to protect the U.S. trade and domestic economy. As the candidate of the Republican Party, Trump pledged to bring reform in overall trade order by reevaluating not only its free trade agreement with Korea but also the North America Free Trade Agreement (NAFTA). He even threatened that the U.S. could completely withdraw the proposed Trans-Pacific Partnership (TPP) trade deal to give priority of benefits to the U.S. economy.

Yoon Woo-jin, a senior researcher from the Korea Institute for Industrial Economics & Trade, said that although the U.S. may not take extreme actions by proposing to withdraw or renegotiate the Korea-U.S. FTA, it is most likely to strengthen policy measures that will restrict imports by imposing anti-dumping tariffs or countervailing duties.

Kim Won-gi, an associate research fellow at the Korea Institute for International Economic Policy, echoed the view. He said the U.S. could exercise safeguard or restraint on international trade to protect domestic industries by issuing administrative orders that do not require Congress approval such as through Section 301 of the U.S. Trade Act of 1974. Kim called on the Korean government to come up with counter measures to prepare for any change that will affect the country’s exports, the major driver for its economic growth.

Throughout his election campaign, Trump has vowed to set up a tariff barrier against China and Mexico, going against the guidelines set up by the World Trade Organization. He has also warned that if he takes office, he would declare China as a “currency manipulator” and request the world’s second largest economy to admit its violation of intellectual property rights and halt various export subsidies.

Industry pundits noted that worsening relations between the U.S. and China under the new U.S. administration would hurt Korean exporters of intermediary goods that are shipped to the U.S. via China. Matters would worsen, they warned, if China follows suit of the world’s No. 1 economy and decides to protect its own industries, further putting a damper on overall global trade, consumption, and investment.

In addition, if the U.S. allows the greenback to weaken against major currencies to protect domestic businesses, a currency war would be triggered, adding woes to not only the Chinese economy but also the Korean economy. Sung Tae-yoon, an economics professor at Yonsei University, said Korea that is highly dependent on its trade with the U.S. and China could suffer a side blow if the trade and currency friction between the world’s top two economies escalates after Trump officially enters the office.

Economists and market experts also warned that Trump could demand its top trading partners for currency revaluation, starting with those that are kept on its currency watch list. In April, the U.S. Treasury Department announced a list of countries on its watch list that includes Korea to keep close monitoring for any unfair trade practice.

Their worries are not limited to trade and currency issues. Trump’s triumph will likely heighten the geopolitical risk on the Korean peninsula as the new Trump administration is expected to take more hawkish stance on North Korea. Also Korea’s costs to cover the stationing of U.S. troops in the country could rise as Trump has demanded so during his presidential campaign. Growing geopolitical uncertainties would lead to the outflow of foreign capital from Korean financial markets, market experts worried.

Park Mi-jung, an analyst at Korea Center for International Finance, said U.S. allies would be asked to pay more for underpinning global security under the new U.S. leadership, a move that is expected to bring about changes in security policies in many countries, raising uncertainties in the global security and triggering capital to leave emerging markets for safer assets.

By Chung Ui-hyun

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