South Korea’s early export figures show return to growth
SOUTH Korea’s early trade figures showed exports returning to growth in November in a positive sign for the economy amid mounting concern over the outlook for global commerce with a new US administration.
The value of shipments increased 5.8 per cent from a year earlier in the first 20 days of November, according to data released on Thursday (Nov 21) by the customs office. That compared with a 0.2 per cent drop initially reported for the full month of October.
Overall imports edged down by 1 per cent, resulting in a US$798 million surplus, the data showed. Differences in the number of working days did not distort this month’s early trade figures.
Like many of the world’s largest exporting nations, South Korea faces potential headwinds on the trade front as Donald Trump prepares to return to the White House with an array of protectionist policies after winning the US election earlier this month.
Trump pledged universal tariffs during his campaign and aims to beef up duties, particularly against China, the biggest trading partner for South Korea. Subsidies provided to South Korean companies operating factories in the US also risk cancellation under the second Trump administration.
The gloomy outlook has prompted some economists to moderate their optimism for South Korea’s trade-reliant economy.
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Bloomberg Economics sees Korean exports to the US falling by as much as 55 per cent by 2028 if Trump rolls out his tariffs in full and countries respond by selling to other markets. The central bank could cut its key interest rate as many as five times by early 2026 to support economic momentum, it said in a separate report this week.
Economic uncertainties are high and risks are tilted to the downside for South Korean growth, according to Rahul Anand, chief of the Korea mission for the International Monetary Fund, speaking in a briefing on Wednesday.
South Korea is among the top 10 nations recording trade surpluses with the US, making it a prime target for Trump. Policymakers fear that higher trade tensions after Trump takes office in January would dent export momentum and put pressure on its companies to spend more money readjusting their supply-chain routes.
“Supply chains would face significant rewiring pressures, and the disruption faced by the corporate sector would meaningfully slow the capex cycle,” Morgan Stanley economists led by Chetan Ahya said in a report. “Asia’s growth could decelerate meaningfully, with the more trade-oriented economies such as Korea and Taiwan facing more downward pressure.” BLOOMBERG
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