South Korea’s early exports show weakness on US tariff impact

[SEOUL] South Korea’s early exports tumbled in September, with higher US tariffs slamming the brakes on shipments in a troubling sign for the trade-dependent economy.

The value of shipments adjusted for differences in the number of working days fell 10.6 per cent from a year earlier in the first 20 days of September, according to data released on Monday (Sep 22) by the customs office. That compared with a revised 6 per cent increase reported for the full month of August, adjusted for working days.

Unadjusted exports rose 13.5 per cent, while overall imports increased 9.9 per cent, resulting in a trade surplus of US$1.89 billion.

Semiconductors, the main driver of exports this year, gained 27 per cent, extending the advance after a 30 per cent increase in August, while autos rose by about 15 per cent. Petrochemicals remained under pressure from tariffs and weaker global demand.

The latest data suggest exporters are struggling after the US imposed a 15 per cent universal tariff on South Korean goods last month. Smartphones and laptops remain exempt, but US President Donald Trump has warned he may extend duties to semiconductors.

South Korea’s exports have held up so far this year, partly because manufacturers rushed to ship goods before tariffs took effect in August. That front-loading provided a temporary lift, but with those early shipments now out of the way, exports are increasingly exposed to the drag from higher duties and slowing global demand.

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Lingering uncertainty is also weighing on sentiment after an immigration raid that led to the detention of more than 300 South Korean workers at a battery plant under construction in Georgia raised diplomatic tensions. While the detained workers were later released and sent home, the immigration sweep has further complicated Seoul’s trade talks with Washington.

Auto exports face added pressure as the 25 per cent US tariff on South Korean cars remains in place until Trump signs an executive order to align it with the 15 per cent universal rate. BLOOMBERG