South Korea exports fall on tariff woes

Daily Express

21-05-2025

Published on: Wednesday, May 21, 2025
Published on: Wed, May 21, 2025
By: AFP Text Size: Stacks of one hundred dollar notes are piled up for counting at the headquarters of the Korea Exchange Bank in Seoul February 3, 2009. - Reuters pic SEOUL: South Korea's exports fell 2.4 percent year-on-year in the first 20 days of May, partly due to weak sales to the United States after Washington imposed and then partly lifted sweeping tariffs, official data showed Wednesday. Last month, the country's exports showed unexpected strength, lifted by robust semiconductor demand even as US tariffs weighed on trade. But early signs suggest that rising trade tensions are beginning to affect South Korea's other key industries -- including automobiles, which have been hit by a 25 percent levy. South Korea's exports totalled $32 billion from May 1 to 20, down 2.4 percent from the same period last year, according to data from the Korea Customs Service. Shipments to the United States, Seoul's key ally, fell 14.6 percent year-on-year during the period, while exports to China and the European Union also declined by 7.2 percent and 2.7 percent, respectively. Asia's fourth-largest economy was hit with a 25 percent across-the-board tariff by the United States -- although it was temporarily reduced to 10 percent for 90 days starting in early April.
Advertisement But specific 25 percent duties remain in place on key exports such as steel, aluminium and automobiles. Following a second round of ministerial-level trade talks last week, Seoul is now in working-level technical discussions with Washington, aiming to secure full tariff exemptions by finalising a trade package by early July. Shipments of semiconductors, South Korea's biggest export, rose 17.3 percent year-on-year. Experts have suggested the rise in chip exports, including the high-tech ones needed for AI, could be due to stockpiling. But the country's other key exports, cars and steel, fell on-year by 6.3 percent and 12.1 percent, respectively, during the May 1-20 period. The auto industry accounts for 27 percent of South Korea's exports to the United States, which takes in nearly half of the country's car exports. Exports of petroleum products, home appliances and wireless communication devices also all dropped, by 24.1 percent, 19.7 percent and 5.9 percent, respectively. Seoul aims to leverage the talks with Washington with commitments to purchase more US liquefied natural gas (LNG) and offer support in shipbuilding, a sector in which South Korea is a leader, after China. Sharp slowdown Cheong In-kyo, South Korea's minister for trade, said for the entire month of May, the country's 'exports to the US and China are expected to decline as the impact of US tariff measures begins to materialise.' On the ongoing tariffs talks with Washington, Cheong said 'we will actively engage ... to find a mutually beneficial solution, with national interest as our top priority.' Seoul's finance ministry announced Wednesday that it will deploy a total of 28.6 trillion won ($20.5 billion) in emergency liquidity and financial aid to support domestic firms impacted by US tariff measures. The amount marks an increase from the 25 trillion won announced by the government last month, but was part of an additional budget dedicated to easing tariff woes for the country's exporters announced earlier this year. 'The government is taking a preemptive approach to the impact of tariffs by formulating an all-ministry export strategy,' the ministry said in a statement. It is also 'working to fundamentally strengthen the ecosystem of high-tech industries such as semiconductors, AI, and secondary batteries,' the ministry added. South Korea's imports also fell 2.5 percent year-on-year to $32.2 billion in the first 20 days of May, resulting in a trade deficit of $300 million, according to the Korea Customs Service. Due to escalating tariffs, experts now expect a meagre 0.4 percent growth in exports for the Asia-Pacific region this year -- a sharp slowdown from 5.7 percent in 2024, according to an APEC report released last week. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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