Moody’s Investors Service has warned that slowing Chinese growth and the prolonged trade dispute between the U.S. and China are combining to put downside pressure on the South Korean economy. 

Christian de Guzman, senior creditor officer of the Sovereign Risk Group at Moody’s, conveyed the global credit rating agency’s views in a briefing in Seoul on Tuesday, noting those factors are already dragging down overall demand for products from a trade-driven economy in South Korea. 

He said China's slowing economic growth is the main problem, noting China’s transition from an importer of intermediate goods into an importer of consumer goods. 

The other factor, he said, is the U.S.-China trade war, singling out South Korea, along with Japan, Germany, Mexico and Canada, as particularly vulnerable to the tit-for-tat tariff hikes between the economic superpowers. However, he predicted South Korea will likely be granted an exemption from possible U.S. auto tariffs. 

In March, Moody’s forecast the South Korean economy will grow two-point-one percent this year and two-point-two percent next year compared with last year's two-point-seven percent growth.