South Korean exports have lost momentum so far this month, dimming this year’s outlook for an economy overshadowed by political turmoil and the potential impact of US President Donald Trump’s tariff plans.
The value of shipments adjusted for working-day differences decreased 2.7 percent from a year earlier for this month, data released yesterday by the customs office showed. That contrasts with a 7.7 percent rise initially reported for last month.
In headline figures distorted by more working days compared with last year, exports grew 16 percent, while overall imports increased 7.7 percent, resulting in a trade surplus of US$804 million. The Lunar New Year holidays came in January this year, whereas a year earlier they were in February.
Photo: Reuters
Exports to the US rose 16 percent and those to China increased 13.6 percent, according to customs data unadjusted for calendar differences.
Semiconductor shipments grew 22.1 percent, while automobile exports increased 40.3 percent.
Exports represent the biggest component of South Korea’s economy, led by shipments of semiconductors. A global rush to develop artificial intelligence technology has been a boon for companies such as SK Hynix Inc and Samsung Electronics Co that produce advanced memory chips.
Their outlook is turning increasingly gloomy after Trump unveiled a series of tax initiatives following his inauguration last month. The risk of a global trade war has become dangerously real after the president announced 25 percent levies on steel and aluminum imports that are to take effect next month, and reciprocal tariffs on numerous trading partners that are expected to hit in April.
“The uncertainty is extremely high and the primary cause is the impact of Trump’s tariff policies on [South] Korea’s export industries,” Korea Economic Research Institute researcher Lee Seung-suk said. “There are considerable concerns in sectors like steel and automobiles. Unless there are measures to ease the tariffs, a decline in exports this year seems inevitable.”
The trade risks add to concerns for an economy hamstrung by stagnant consumption and political turmoil that have weighed on consumer confidence. After suspended South Korean president Yoon Suk-yeol imposed martial law briefly in December last year, he was arrested on charges of insurrection, and the South Korean Constitutional Court is deliberating whether to finalize his ouster.
South Korea’s deputy trade minister visited Washington this week and asked the US to exclude his country from its tariff plans, a government statement said.
He highlighted a free-trade agreement in place between the two nations and stressed investments South Korea has made in the US, it said.
With headwinds for the economy intensifying, the Bank of Korea (BOK) last month cut its growth forecast for this year. The central bank’s board is set to meet for an interest rate decision next week. The BOK pivoted to an easing cycle with a rate cut in October last year and followed that with another reduction in November.
Weak export growth is a concern for the central bank given the economy’s heavy reliance on trade. South Korean companies are widely embedded across global supply chains, including automobiles, rechargeable batteries, shipbuilding and refined oil.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for
RSS