South Korea’s early trade data show exports bouncing back
The Bank of Korea has conducted three interest-rate cuts since October partly owing to concerns over Trump’s tariff policies
[SEOUL] South Korea’s early trade data showed exports bouncing back this month, offering some relief for policymakers struggling to shield the economy from the impact of Donald Trump’s tariffs campaign.
The value of shipments adjusted for working-day differences increased 8.2 per cent from a year earlier in the first 20 days of March, according to data released on Friday (Mar 21) by the customs office. That compared with a 5.9 per cent fall initially reported for the full month of February.
Unadjusted exports rose 4.5 per cent while overall imports decreased by 1.4 per cent, resulting in a trade surplus of US$1.1 billion. The March numbers present a more accurate picture of export trends after trade figures were distorted by Lunar New Year holidays in the first two months of 2025.
A mix of concerns and hopes hangs over the trade outlook. While US tariffs may begin to impact global demand in the months to come, Samsung Electronics, South Korea’s biggest exporter, raised expectations for a recovery in the memory chip market as early as the second quarter.
A variety of South Korean companies play an integral role in global supply chains, and semiconductor manufacturers form the crown jewel of South Korea’s export sector. Their sales growth has been weakening for months.
Semiconductor exports rose 11.6 per cent from a year earlier in the first 20 days of March, customs data showed. Meanwhile, automobile shipments increased by 3.7 per cent. The sales of ships jumped 80.3 per cent while exports of oil products sank 24.6 per cent, according to the customs data.
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Trade statistics released earlier this month showed South Korea’s chip sales to China have fallen from a year earlier for two consecutive months, as the US slaps the world’s second-largest economy with tariffs and export controls.
South Korea faces its own share of risks from Trump’s protectionist policies, including his pledge to roll back subsidies for foreign chipmakers on American soil. Samsung is building a chip factory in Texas with subsidies promised under the Biden administration.
During his speech to Congress earlier this month, Trump described South Korea as a country with more unfair tariffs against American products than China even though the US provides security guarantees for Seoul. South Korea said its effective tariff on US imports amounted to less than 1 per cent last year due to their free trade deal that came into effect in 2012.
The US increasingly rivals China as a leading source of demand for South Korean products as technology cooperation between Washington and Seoul tightens. An economic downturn in China is also squeezing demand for imports while the world’s second-largest economy continues to replace foreign sources of products with its own as it seeks to strengthen its ability to withstand trade disruptions.
“Trade has remained stable in early 2025, but mounting geoeconomic tensions, protectionist policies and trade disputes signal likely disruptions ahead,” Geneva-based UN Trade and Development said in a report earlier this month.
The Bank of Korea has conducted three interest-rate cuts since October partly owing to concerns over Trump’s tariff policies. Combined with lacklustre consumption and the impact of President Yoon Suk-yeol’s brief martial law declaration in December, the cooling export momentum has prompted authorities to slash their forecast for economic growth this year. BLOOMBERG
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