Exports to US, China plunge over 20%, likely to worsen
South Korea’s exports plunged nearly 24 percent in the first 10 days of May, signaling that the US Trump administration's tariffs are beginning to take a toll on the trade-dependent economy.
Outbound shipments totaled $12.8 billion during the May 1-10 period, down 23.8 percent from a year earlier, according to preliminary data from the Korea Customs Service released Monday.
Factoring in fewer workdays — five days during the period this year compared to 6.5 days in 2024 — average daily exports fell by just 1 percent, the agency added.
Shipments to China and the US — Korea’s two largest export markets — fell 20.1 percent and 30.4 percent, respectively. Exports to Vietnam declined 14.5 percent, while those to the European Union plunged 38.1 percent. Among the top five destinations, only Taiwan posted growth, with its shipments jumping 14.2 percent.
Across Korea’s top 10 export categories, all saw sharp declines except semiconductors, which climbed 14 percent on-year. The chip sector remains largely unaffected by Trump's recent tariffs.
Automobile exports, Korea’s second-largest export item, fell 23.2 percent to $1.12 billion, while auto parts shipments plunged 42.6 percent to $205 million. Exports of petroleum products slumped 36.2 percent, with steel and ship sales down 41.2 percent and 8.7 percent, respectively. Home appliances posted the steepest fall, tumbling 47.2 percent.
Imports also dropped, falling 15.9 percent to $14.6 billion during the same period.
Inbound shipments from China fell 16.8 percent to $3.21 billion, while those from the US declined 20 percent to $1.8 billion. Imports from the EU and Taiwan slid 21.1 percent and 12.7 percent, respectively. Imports increased only from Vietnam and Russia, up 14.5 percent and 22 percent, respectively.
Most major import categories saw declines, with only semiconductor parts and automobiles recording gains. Crude oil — Korea’s largest import item — dropped 6.1 percent by volume, while imports of semiconductors and gas fell 8.2 percent and 29.1 percent, respectively.
The data resulted in a $1.7 billion trade deficit for the May 1-10 period, reducing the country’s cumulative trade surplus this year to $10.28 billion, down from $12.15 billion at the end of April.
The export slump marks a sharp reversal from April, when shipments initially rose 13.7 percent in the first 10 days and ultimately ended the month up 3.7 percent at $58.2 billion — the highest April total on record. Even then, however, exports to the US had already begun to weaken, falling 6.8 percent.
Economists warn that the worst may be yet to come, with the full impact of renewed tariff measures by US President Donald Trump still taking shape. Since March, the US has imposed a 25 percent tariff on imported steel and aluminum, followed by a 25 percent levy on automobiles and a universal "baseline" 10 percent tariff on all foreign goods. Meanwhile, Trump announced 25 percent "reciprocal" tariffs on April 2, which he suspended a week later for 90 days until July 8. The US leader has also signaled new tariffs targeting semiconductors and biopharmaceuticals soon.
“With the negative impact of external uncertainties — particularly the fallout from Trump’s tariff policies — beginning to emerge, a full-fledged downturn in export performance may be just beginning,” the Hyundai Research Institute said in its updated economic outlook released two weeks ago.
The institute warned that exports are unlikely to drive economic growth this year and projected a 4 percent decline in export growth for 2025, down from an 8.1 percent gain in 2024. It also slashed Korea's growth forecast to 0.7 percent from 1.7 percent in December.
The Korea Institute of Finance echoed the concerns in its own update last week, lowering its 2025 GDP forecast to 0.8 percent from 2 percent, and anticipating just 0.3 percent growth in both imports and exports.
jwc@heraldcorp.com
