South Korea's exports dipped in May amid a moderation in ship
Quick overview
- South Korea’s exports fell 13% in May 2024, primarily due to reduced shipments to China and the US amid ongoing tariff disputes.
- Industry Minister Ahn Duk-geun noted that the decline in exports to the US and China indicates the impact of tariff measures on the global economy.
- Despite strong demand for semiconductors, overall exports were affected, with automobile exports decreasing by 4.4% due to US tariffs.
- While exports to Taiwan surged by 49.6%, shipments to Southeast Asian nations dropped by 13%, and exports to the EU rose by 4%.
South Korea’s exports dipped in May amid a moderation in shipments to China and the US, caused by President Donald Trump’s broad tariffs. Exports from Asia’s fourth-largest economy, a precursor to international commerce, dropped 13% to $57.27 billion in the same month in 2024.
According to South Korean Industry and Trade Minister Ahn Duk-geun, “declines in exports to both the United States and China, the two biggest markets, suggest tariff measures are having an impact on the global economy as well as our exports.”.
Strong chip sales encountered downward pressure from Trump’s tariff threats, causing the first decline since January. However, a Reuters poll of economists predicted a 2.7 percent fall, which was more severe than the May decline. In reality, exports increased by 1.0 percent on a working-day adjusted basis.
China and the United States agreed to a 90-day truce in mid-May that significantly reduced their tariffs on one another after months of back-and-forth retaliatory actions.
However, Trump accused Beijing of breaking the agreement and threatened to take more severe action. Additionally, he declared that he would double global steel and aluminum tariffs to 50%.
May shipments from South Korea to China and the US dropped 8 percentage points.
Exports to Taiwan increased 49.6%, exports to Southeast Asian nations decreased 13%, and exports to the European Union increased 4.0%.
The ministry reports that while semiconductor exports increased 21.2% due to strong demand for advanced memory chips, automobile exports decreased 4.4% because of US tariffs and production at Hyundai Motor’s new facility in the US state of Georgia.
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 15 years of working experience in investment trading.
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