Seoul: South Korea's exports experienced a decline of 1.3 percent in May compared to the previous year, ending a three-month period of growth. This downturn is primarily attributed to reduced outbound shipments to the United States, influenced by the U.S. President Donald Trump's comprehensive tariff policies, according to government data released on Sunday.
According to Yonhap News Agency, the Ministry of Trade, Industry and Energy reported that South Korea's outbound shipments totaled US$57.3 billion last month, down from $58.02 billion in the same period the previous year. Imports also decreased by 5.3 percent year-on-year to $50.3 billion, resulting in a trade surplus of $6.94 billion.
In May, exports to the U.S. fell by 8.1 percent year-on-year to $10 billion, largely due to reduced exports in the automotive sector, impacted by the Trump administration's 25 percent tariffs on imported cars. Similarly, exports to China dropped by 8.4 percent to $10.4 billion, affected by low demand for semiconductors and petrochemical products. Exports to the Association of Southeast Asian Nations (ASEAN) decreased by 1.3 percent to $10 billion.
Shipments to Latin America saw a decline of 11.6 percent to $2.2 billion, as demand for Korean steel and auto parts weakened due to the U.S. tariffs. Exports to Japan, India, and the Middle East also fell, registering decreases of 8.7 percent, 3.7 percent, and 8.4 percent, respectively.
Conversely, exports to the European Union increased by 4 percent to $6 billion, marking a rise for the third consecutive month due to strong demand for automobiles and semiconductors. Industry Minister Ahn Duk-geun noted the broader impact of U.S. tariffs on the global economy and South Korea's exports, especially the decrease in exports to major markets such as the U.S. and China.
A significant drop in international oil prices to the low $60 range in May contributed to a more than 20 percent year-on-year decline in exports of petroleum and petrochemical products, adding to the overall decrease in outbound shipments. However, chip exports surged by 21.2 percent to $13.8 billion, driven by robust demand for high-value products like high bandwidth memory (HBM).
Wireless communications products saw an increase of 3.9 percent to $1.3 billion, fueled by a 30 percent rise in smartphone exports. Exports of computers, including solid state drives, rose by 2.3 percent to $1.1 billion, while biohealth products and vessels grew by 4.5 percent and 4.3 percent to $1.4 billion and $2.2 billion, respectively.
Nonetheless, auto shipments declined by 4.4 percent to $6.2 billion as exports to the U.S. plummeted by 32 percent following the expansion of Korean carmakers' manufacturing in America. Steel shipments decreased by 12.4 percent to $2.6 billion, with U.S. exports down by 20.6 percent amid 25 percent tariffs on all steel imports.
Exports of petroleum products and petrochemicals fell by 20.9 percent to $3.6 billion and 20.8 percent to $3.2 billion, respectively. Machinery exports also decreased by 5.3 percent to $4.06 billion due to reduced investments over global economic slowdown concerns. However, exports of agro-fisheries and cosmetics expanded by 5.5 percent and 9.3 percent, both reaching a record high of $1 billion.
In response to these challenges, Industry Minister Ahn stated that the government will actively communicate its position on U.S. tariff measures to the Trump administration and work towards mutually beneficial solutions to protect export companies and maximize national interest.