South Korea’s May Exports Fall as U.S.-China Trade War Bites
South Korea — a key barometer of global trade health — reported its first decline in exports in four months, underlining the pressure facing Asian economies amid escalating U.S.-China trade tensions.
Exports Dip 1.3%, Led by Declines in U.S. and China Shipments
Exports from Asia’s fourth-largest economy fell 1.3% year-on-year in May to $57.27 billion, according to data released Sunday by the Ministry of Trade, Industry and Energy. While the drop was smaller than the 2.7% decline forecast by economists in a Reuters poll, the symbolic shift into negative territory reveals the growing impact of geopolitical friction.
Trade Minister Ahn Duk-geun pointed directly to the cause:
“Declines in exports to both the United States and China, the two biggest markets, suggest U.S. tariff measures are having an impact on the global economy as well as our exports.”
Indeed, exports to the U.S. fell 8.1%, while shipments to China — South Korea’s largest trading partner — dropped 8.4%.
Tech Still Resilient, But Cars Hit by Tariffs
Despite the broader trade slump, South Korea’s tech industry showed resilience. Semiconductor exports surged 21.2%, driven by sustained demand for advanced memory chips. However, other sectors were not so lucky:
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Automobile exports fell 4.4%, as U.S. tariffs and output shifts related to Hyundai’s new Georgia-based factory dragged the numbers down.
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Exports to Southeast Asia slipped 1.3%.
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On the brighter side, exports to Taiwan skyrocketed 49.6%, while shipments to the EU rose 4.0%.
Trump’s Tariff Policies Reignite Uncertainty
Earlier in May, Washington and Beijing announced a 90-day tariff truce, but optimism quickly faded. On Friday, President Trump accused China of violating the agreement and threatened to escalate tariff measures further — including doubling global steel and aluminium duties to 50%.
South Korea is currently in a 90-day negotiation window regarding its own 25% reciprocal tariffs from the U.S., which continue to cast a shadow over bilateral trade.
Imports Down, Trade Surplus Grows
While exports dipped, imports fell more sharply — down 5.3% to $50.33 billion — resulting in a trade surplus of $6.94 billion, the largest since June 2024.
What It Means for Asia and Global Supply Chains
As one of the most trade-exposed economies in the world, South Korea’s export data often signals early warning signs for broader global trends. With geopolitical tensions intensifying and tariff uncertainties hanging over global supply chains, the May dip could foreshadow further weakness in cross-border trade activity across Asia.
While the semiconductor sector continues to provide cushion, the country’s heavy reliance on China and U.S. markets — both of which are politically volatile — leaves South Korea and similar export-oriented economies exposed to prolonged disruptions.
