SEOUL: South Korea recorded its first decline in exports in four months during May, as geopolitical trade tensions weighed heavily on shipments to its two largest markets—the United States and China. According to official government data released on Sunday, outbound shipments from Asia’s fourth-largest economy fell 1.3% year-on-year to $57.27 billion.
Industry and Trade Minister Ahn Duk-geun attributed the downturn to the ongoing global trade conflict, intensified by U.S. President Donald Trump’s aggressive tariff policies. “Declines in exports to both the United States and China, the two biggest markets, suggest U.S. tariff measures are having an impact on the global economy as well as our exports,” he stated.
Despite the overall decrease, the contraction was less severe than market expectations. A Reuters poll of economists had projected a 2.7% decline. On a working-day adjusted basis, exports actually rose by 1.0%.
The setback comes shortly after Washington and Beijing reached a 90-day truce in mid-May, aimed at unwinding reciprocal tariffs. However, the fragile détente was called into question following President Trump’s recent accusations that China violated the terms of the agreement. The President also threatened to double global tariffs on steel and aluminium to 50%, raising fresh concerns across global supply chains.
South Korea’s exports to the United States fell sharply by 8.1%, while shipments to China dropped 8.4%. In contrast, exports to the European Union saw a modest increase of 4.0%, and shipments to Taiwan surged 49.6%. Exports to Southeast Asia declined slightly by 1.3%.
The technology sector remained a bright spot, with semiconductor exports rising 21.2% due to continued global demand for high-end memory chips. However, the automotive sector faced headwinds, with vehicle exports falling 4.4%, impacted by US tariffs and operational adjustments following Hyundai Motor’s launch of its new manufacturing facility in Georgia, United States.
On the import side, South Korea recorded a 5.3% decline, bringing the total to $50.33 billion for May. This resulted in a trade surplus of $6.94 billion, the highest monthly surplus since June 2024.
-Reuters
