South Korean early May exports fall as shipments to US slump
President Donald Trump has slapped 25 per cent duties on exports of cars, steel and aluminium
[SEOUL] South Korea’s early trade data showed exports falling again this month especially to the US as negotiations between Seoul and Washington continue over tariffs on shipments from the Asian nation.
The value of exports slipped 2.4 per cent from a year earlier in the first 20 days of May, according to data released on Wednesday (May 21) by the customs office. That compared with a 0.7 per cent fall initially reported for exports adjusted for differences in working days in the full month of April. Overall imports decreased by 2.5 per cent, resulting in a trade deficit of US$300 million.
Outbound shipments to the US and China were down 14.6 per cent and 7.2 per cent, respectively, while exports to Taiwan and Hong Kong were up 28.2 per cent and 4.5 per cent.
US President Donald Trump has slapped 25 per cent duties on exports of cars, steel and aluminium. He has also targeted South Korea, a close US ally, with a 25 per cent across-the-board tariff, which was temporarily lowered to 10 per cent for 90 days from early April while talks take place.
Auto and auto parts exports fell 6.3 per cent and 10.7 per cent, respectively, while outbound shipments of steel products dropped 12.1 per cent from a year earlier. Semiconductors, South Korea’s biggest driver of earnings from abroad, helped the overall exports hold up with a 17.3 per cent gain.
The South Korean economy’s dependence on exports makes it especially vulnerable to Trump’s trade policies. But political uncertainty ahead of a presidential election is hampering efforts to reach an early deal.
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Minimising any impact from Trump’s tariff measures will be a priority for South Korea’s next leader, who will need to revive an economy that has taken a hit from a political crisis triggered by ex-president Yoon Suk-yeol’s short-lived martial law decree in December.
The two leading candidates for the Jun 3 snap vote are divided on how to approach negotiations with the US.
Lee Jae-myung, the nominee of the opposition Democratic Party and leader in the polls, has said there’s no need to rush into a quick agreement, while Kim Moon-soo of the conservative People Power Party has vowed to seek an early summit with Trump to resolve the tariff issue, if elected.
The two countries are holding working-level talks in Washington this week to follow up on their trade representatives’ back-to-back meetings in South Korea last week when global trade chiefs gathered for an Asia-Pacific Economic Cooperation meeting.
Reflecting the fallout from Trump’s tariff campaign, a state-funded think tank recently cut South Korea’s 2025 growth forecast to 0.8 per cent. Although South Korea was among the first countries to begin trade talks with the US, the Asian nation has said any deal is unlikely before the June vote. BLOOMBERG
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