How Did S. Korea's Exports Increase by 1.3% in August Amid US Tariffs?
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Synopsis
In a remarkable turn of events, South Korea's exports increased by 1.3% in August, defying the odds posed by US tariffs. The surge is fueled by robust semiconductor demand, showcasing the nation's resilience in the global market. Discover the trends and challenges shaping South Korea's export landscape in this detailed report.
Key Takeaways
- Exports rose by 1.3% in August, totaling $58.4 billion.
- Semiconductor exports surged by 27.1% to $15.1 billion.
- Imports fell by 4%, resulting in a $6.51 billion trade surplus.
- Automobile exports reached an all-time high for August at $5.5 billion.
- US tariffs had a significant impact on exports to the US, which dropped by 12%.
Seoul, Sep 1 (NationPress) In August, South Korea's exports experienced a growth of 1.3 percent compared to the same month last year, showcasing resilience against the impacts of US tariffs, driven largely by strong semiconductor demand, as reported by the government on Monday.
Outbound shipments reached $58.4 billion last month, marking a rise for the third consecutive month, according to data from the Ministry of Trade, Industry and Energy.
Meanwhile, imports saw a decrease of 4 percent year-on-year, totaling $51.89 billion, which resulted in a trade surplus of $6.51 billion, as per Yonhap news agency.
Semiconductor exports surged by 27.1 percent year-on-year, hitting a record high of $15.1 billion in August, driven by rising memory chip prices fueled by global investments in artificial intelligence (AI) infrastructure.
Automobile exports rose by 8.6 percent year-on-year, reaching $5.5 billion, which is the highest figure recorded for any August, supported by robust demand for electric vehicles (EVs) and hybrid models.
Ship exports climbed 11.8 percent to $3.14 billion, marking an increase for the sixth consecutive month, while agro-fisheries products saw a 3.2 percent rise to $960 million, also the highest for any August.
Exports of cosmetics expanded 5.1 percent to $870 million, driven by the global popularity of Korean culture, while electronic device exports increased 5.6 percent to $1.29 billion, both setting new August records.
However, exports of petroleum and petrochemical products fell by 4.7 percent and 18.7 percent year-on-year to $4.17 billion and $3.38 billion, respectively, due to global oversupply.
Shipments of displays declined 9.2 percent to $1.65 billion, with wireless communications equipment exports falling by 14.1 percent to $1.56 billion, and secondary battery shipments plummeting 31.3 percent to $490 million.
Steel exports dipped 12.6 percent to $690 million, impacted by 50 percent U.S. tariffs on all steel imports.
By region, exports to the United States dropped 12 percent year-on-year to $8.74 billion, as shipments of steel, automobiles, and machinery faced declines due to the effects of the previous administration's extensive tariff measures.
This marks the first instance since August 2023 that Korea's exports to the U.S. fell below the $9 billion threshold, according to Seo Ga-ram, a ministry official, who noted that U.S. tariffs had a significant impact.
Specifically, steel exports to the U.S. plummeted by 32.1 percent, while auto parts exports decreased by 14.4 percent.
Seo emphasized that the government will strive to mitigate the consequences of Washington's forthcoming stricter semiconductor export controls, which could strip Samsung Electronics Co. and SK hynix Inc. of their validated end-user status, in an effort to protect Korean chipmakers.
Exports to China fell 2.9 percent to $11.01 billion, reflecting overall weaknesses across export items.
Exports to the European Union declined by 9.2 percent to $5.81 billion due to sluggish demand for machinery, petrochemicals, and biohealth products.
Shipments to Japan and India also dipped 5.2 percent and 4.8 percent to $2.37 billion and $1.56 billion, respectively.
Conversely, exports to the Association of Southeast Asian Nations (ASEAN) grew by 11.9 percent to $10.89 billion, marking a third consecutive month of growth, driven by strong demand for semiconductors and ships.
Point of View
It's crucial to recognize the complex interplay between global trade policies and local economies. South Korea's ability to achieve a 1.3% increase in exports, primarily through semiconductor strength, demonstrates resilience and adaptability. However, the ongoing impact of US tariffs presents a significant challenge that warrants ongoing attention and strategic governmental action.
NationPress
01/09/2025
Frequently Asked Questions
What drove the increase in South Korea's exports in August?
The increase was primarily driven by a strong demand for semiconductors, which saw exports surge by 27.1% year-on-year.
How much did South Korea's exports grow in August?
South Korea's exports grew by 1.3% in August compared to the same month last year.
What impact did US tariffs have on South Korea's exports?
US tariffs negatively affected South Korea's exports, particularly to the US, where shipments fell by 12% year-on-year.
What sectors saw growth in exports?
Key sectors that saw growth include semiconductors, automobiles, and ship exports.
Did imports increase or decrease in August?
Imports decreased by 4% year-on-year, leading to a trade surplus.
