Why Did South Korea's Exports Decline by 1.3% in May?

Seoul, June 1 (NationPress) South Korea witnessed a 1.3% decline in exports year-on-year in May, ending a three-month period of growth, primarily due to a significant drop in outbound shipments to the United States. This decline is attributed to the comprehensive tariff measures enacted by the administration of U.S. President Donald Trump, as revealed by government data on Sunday.

Last month, total outbound shipments reached US$57.3 billion, a decrease from $58.02 billion recorded in the same month the previous year, according to the Ministry of Trade, Industry and Energy.

Meanwhile, imports fell 5.3% year-on-year to $50.3 billion, which resulted in a trade surplus of $6.94 billion, as reported by Yonhap news agency.

In May, exports to the United States plummeted 8.1% compared to the previous year, totaling $10 billion, largely due to decreased automotive exports affected by the 25% tariffs imposed by the Trump administration.

Exports to China also fell 8.4% year-on-year to $10.4 billion, driven by weak demand for semiconductors and petrochemical products, while shipments to the Association of Southeast Asian Nations (ASEAN) declined 1.3% to $10 billion.

Conversely, exports to the European Union increased by 4% to $6 billion, marking the third consecutive month of growth, boosted by strong demand for automobiles and semiconductors.

Industry Minister Ahn Duk-geun stated, "The tariffs imposed by the U.S. appear to be impacting both the global economy and South Korea's exports, as evidenced by a decline in shipments to our two largest markets—the U.S. and China."

He further noted that the significant drop in international oil prices to the low $60 range in May contributed to a more than 20% decline in exports of petroleum and petrochemical products, which was another key factor in the overall export decline.

By product category, semiconductor exports surged 21.2% year-on-year to $13.8 billion, the highest figure recorded for any May, driven by robust demand for high-value products such as high bandwidth memory (HBM).

Outbound shipments of wireless communication products saw a 3.9% increase to $1.3 billion, fueled by a 30% rise in smartphone exports.

Exports of computers, including solid state drives, grew 2.3% to $1.1 billion, while exports of biohealth products and vessels rose 4.5% and 4.3% to $1.4 billion and $2.2 billion, respectively.

However, automotive shipments declined 4.4% to $6.2 billion due to sluggish demand from the U.S.

Exports of petroleum products fell 20.9% to $3.6 billion, while petrochemical exports decreased 20.8% to $3.2 billion.

In contrast, exports of agro-fisheries and cosmetics grew by 5.5% and 9.3% respectively, with both categories reaching a record high of $1 billion.