South Korea’s early trade data show export momentum continues

[SEOUL] South Korea’s early exports continued to grow in November, supported by sustained demand for semiconductors even as steep US tariffs on autos weighed on trade momentum.

The value of shipments adjusted for differences in the number of working days increased 8.2 per cent from a year earlier in the first 20 days of November, according to data released on Friday (Nov 21) by the customs office. That compared with a 14 per cent gain reported for the full month of October.

Unadjusted shipments also gained 8.2 per cent, while overall imports rose 3.7 per cent, resulting in a trade surplus of US$2.4 billion.

Semiconductor exports climbed almost 27 per cent, continuing a recovery that’s been fuelled by artificial intelligence and data centre demand. Auto shipments also gained 23 per cent, while petrochemicals and steel both failed to continue the momentum amid sluggish demand and tougher US protectionist measures.

The US and South Korea clinched a landmark tariff agreement last month after three months of negotiations, capping American duties on Korean goods at 15 per cent.

However, a 25 per cent levy on automobiles remains in place for now. It’s expected to be retroactively lowered to 15 per cent, effective Nov 1, once legislation tied to the US$350 billion US investment deal is submitted to the National Assembly later this month.

President Lee Jae Myung earlier said that finalising the agreement involved intense negotiations over national security issues such as nuclear fuel enrichment and submarines.

While South Korea secured a deal to cap US tariffs on its goods, the rates remain well above the levels the country enjoyed under the free trade agreement. Still, the formal trade agreement is expected to bring greater stability and help restore confidence among manufacturers with exports accounting for more than 40 per cent of South Korea’s gross domestic product.

By destination, shipments to the US rose 5.7 per cent, to China 10.2 per cent, and to the European Union 4.9 per cent. Exports to Singapore and India declined 21.3 and 6.5 per cent, respectively.

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The data offer a final read on South Korea’s export sector before the Bank of Korea’s policy meeting on Nov 27. Some economists expect the central bank to keep rates steady as the board monitors the lagged effects of the US deal, while staying alert to household debt and real estate risks at home. BLOOMBERG