Will South Korea's Exports to the US and China Continue to Fall?
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Synopsis
As South Korea faces a looming decline in exports to the US and China, the implications of recent tariffs are becoming increasingly evident. Trade Minister Cheong In-kyo highlights the urgent need for tailored support to navigate these challenges. Discover how these changes could shape the future of South Korea's trade relations.
Key Takeaways
- Exports to the U.S. and China are declining due to new tariffs.
- South Korea's cumulative exports decreased 0.7% in early 2025.
- Emergency measures are being implemented to support exporters.
- Increases in exports to ASEAN and the European Union showcase market diversification.
- Discussions with the U.S. aim for a mutually beneficial trade agreement.
Seoul, May 21 (NationPress) It is anticipated that South Korea's exports to both the United States and China will witness further declines in May, as the ramifications of the Donald Trump administration's extensive tariff policies start to take effect, according to the nation's leading trade official.
Trade Minister Cheong In-kyo made this observation following the release of government data indicating a 2.4 percent drop in exports during the first 20 days of May compared to the same period last year, primarily due to reduced shipments to the U.S. amid ongoing tariff implementations.
For the first four months of 2025, total exports reached $217.9 billion, reflecting a 0.7 percent decrease from the previous year, according to figures from the Ministry of Trade, Industry and Energy, as reported by Yonhap news agency.
Shipments to the U.S. and China fell by 3.3 percent and 4.1 percent, respectively, while exports to ASEAN and the European Union saw increases of 5.9 percent and 2.1 percent.
"In May, the effects of the U.S. tariff policies are expected to be fully realized, resulting in a decline in exports to both the U.S. and China," Cheong stated during a meeting with officials managing export-related matters.
He continued, "We will uphold an emergency response system in collaboration with relevant agencies and persist in offering customized assistance to tackle export obstacles in each region."
The government has committed to rapidly implement funds allocated in the supplementary budget, including 84.7 billion won for the exporter voucher program and 150 billion won for small and medium-sized exporters through trade insurance.
Technical discussions with the U.S. regarding the tariff policy are currently underway, and we will proactively participate in dialogues to find mutually advantageous solutions while prioritizing our national interests, Cheong added.
On Tuesday (U.S. time), South Korea and the United States commenced a second round of working-level talks in Washington, as Seoul aims for a complete exemption from the tariff policies.
Last month, the U.S. initiated reciprocal tariffs on partner nations, including 25 percent duties on South Korea, only to momentarily suspend them to allow for one-on-one negotiations.
Seoul and Washington subsequently agreed to strive for a "package" agreement on trade and related issues before July 8, when Trump's 90-day pause on reciprocal tariffs is set to conclude.
Point of View
It is crucial to maintain an unbiased stance while recognizing the challenges South Korea faces in its export markets. The government is taking proactive measures to address these issues, demonstrating its commitment to supporting exporters amidst fluctuating global trade dynamics.
NationPress
08/06/2025
Frequently Asked Questions
What are the primary factors contributing to the decline in South Korea's exports?
The decline is largely attributed to the effects of ongoing tariff measures imposed by the United States, which have significantly impacted shipments to both the U.S. and China.
How is the South Korean government responding to these export challenges?
The government is implementing an emergency response system and is committed to providing tailored support through allocated funds in the supplementary budget to assist exporters facing challenges.
What is the expected timeline for the effects of the U.S. tariffs to fully materialize?
Trade Minister Cheong In-kyo indicated that the full impact of U.S. tariff measures is expected to be realized in May.
Are there any positive trends in South Korea's export markets?
Yes, while exports to the U.S. and China are declining, shipments to ASEAN and the European Union have seen increases of 5.9% and 2.1%, respectively.
What discussions are taking place between South Korea and the U.S. regarding tariffs?
Technical consultations are ongoing to negotiate tariff policies, with South Korea seeking a complete exemption from these tariffs.
