South Korea’s early trade data show robust exports despite tariffs
Talks with Washington to finalise a trade deal agreed in July remain stalled over details of the US$350 billion investment fund linked to the pact
[SEOUL] South Korea’s early exports advanced in October, aided by resilient semiconductor demand even as US tariffs weighed on momentum and holidays created distortions.
The value of shipments adjusted for differences in the number of working days increased 9.7 per cent from a year earlier in the first 20 days of October, according to data released on Tuesday (Oct 21) by the customs office. That compared with a revised 6.1 per cent drop reported for the full month of September.
Unadjusted shipments fell 7.8 per cent, while overall imports slipped 2.3 per cent, resulting in a trade deficit of US$2.8 billion.
The rebound came even though there were fewer working days in the first 20 days of October compared to last year due to South Korea’s Chuseok holidays, which ran from Oct 3 to 9. That curtailed factory activity and shipping volumes. In 2024, the holiday fell in September, making year-earlier comparisons less meaningful.
Semiconductor exports jumped 20.2 per cent, while vessel shipments climbed 11.7 per cent. Auto exports, meanwhile, slumped 25 per cent as higher US duties began to weigh on the sector.
The impact of higher US tariffs continues to build after US President Donald Trump’s 15 per cent duty on South Korean goods took effect in August, while tariffs on automobiles remain at 25 per cent as an executive order to reduce them has yet to be signed. Some exporters had front-loaded shipments earlier this year ahead of the tariff hikes; that temporary boost is now fading.
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Talks with Washington to finalise a trade deal agreed in July remain stalled over details of the US$350 billion investment fund linked to the pact. Seoul is seeking ways to mitigate the currency impact from the potential outflow, and the absence of a formal trade deal has added to uncertainty over future shipments to the US, South Korea’s key export market.
With exports equivalent to over 40 per cent of South Korea’s GDP, a formal trade deal is key to ushering in greater stability and restoring manufacturers’ confidence.
By destination, exports to the US tumbled nearly 24.7 per cent, while shipments to China dropped 9.2 per cent. Exports to Taiwan, meanwhile, surged 58.1 per cent.
The early trade figures will be the last key indicator for South Korea’s export-driven economy before the Bank of Korea (BOK) policy meeting on Thursday, when the board decides on interest rates. Despite slowing exports, most economists expect the BOK to keep rates unchanged as it balances export risks against rising household debt and a sustained rally in Seoul apartment prices. BLOOMBERG
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