South Korea finance minister is 'very cautiously optimistic' about trade with US

  • Yoo Il-ho says he worries about Trump's protectionist stance
  • "I am cautiously, very cautiously optimistic," he said

President Donald Trump's stance on trade is cause for "much" concern to South Korea, the country's finance minister told CNBC on Monday, while simultaneously playing down the economic threat posed by North Korea.

On U.S. trade policy, Yoo Il-ho said, "We worry about that much. Many other people in the world had the same kind of worry when President Trump had a campaign speech or campaign rhetoric, that he will do many things ... to protect the American people, American trade. It is in the tint of protectionism."

Trump has been vocal about criticizing existing trade agreements, asking for the renegotiation of treaties such as NAFTA and effectively scrapping a massive Pacific trade deal.

"We are going to do our effort to decrease the trade surplus with the United States," Yoo said. "I am cautiously — very cautiously — optimistic."

The deputy prime minister played down the rising price of South Korean credit default swaps, which recently hit their highest level in nine months. Such swaps are designed to protect lenders from the risk of a South Korean default.

Tensions with North Korea have increased recently as that country reportedly detained a U.S. citizen and has increased demonstrations of its military strength.

Yoo said that while North Korean threats certainly pose a risk for investors, it is something that his country has been dealing with for a long time — since the two halves of the Korean Peninsula were at open war with each other in the early 1950s.

"We have been in that kind of situation for 70 years, so I believe that we have some confidence that we are rather secure — although the North Korean threat is [a] ... real one," he said, while noting that South Korea remains "confident" regardless.