Seoul: South Korea's exports decreased by 1.3 percent in May compared to the previous year, marking the end of a three-month growth streak. This decline is attributed to a significant reduction in shipments to the United States, influenced by the tariff policies implemented by the U.S. President Donald Trump administration, as per the government data released.
According to Yonhap News Agency, the Ministry of Trade, Industry and Energy compiled data indicating that outbound shipments amounted to $57.3 billion last month, down from $58.02 billion in the previous year. Imports also fell by 5.3 percent year-on-year to $50.3 billion, leading to a trade surplus of $6.94 billion.
In May, exports to the United States dropped by 8.1 percent from the previous year, totaling $10 billion. This reduction was primarily due to the automotive sector's weak performance, which suffered under the 25 percent tariffs imposed by the Trump administration. Exports to China also saw an 8.4 percent decrease year-on-year, reaching $10.4 billion, amid low demand for semiconductors and petrochemical products. Exports to the Association of Southeast Asian Nations (ASEAN) decreased by 1.3 percent to $10 billion.
Conversely, exports to the European Union increased by 4 percent to $6 billion for the third consecutive month, driven by strong demand for automobiles and semiconductors. Industry Minister Ahn Duk-geun noted that the U.S. tariffs are impacting the global economy and South Korea's exports, as evidenced by the decline in exports to the U.S. and China, South Korea's two largest markets.
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, further impacting overall outbound shipments. However, chip exports rose by 21.2 percent year-on-year to $13.8 billion, driven by strong demand for high-value products like high bandwidth memory (HBM).
Wireless communications products saw a 3.9 percent increase in exports to $1.3 billion, with smartphone exports jumping by 30 percent. Exports of computers, including solid state drives, rose by 2.3 percent to $1.1 billion, while biohealth products and vessels exports grew by 4.5 percent and 4.3 percent to $1.4 billion and $2.2 billion, respectively. Despite this, auto shipments fell by 4.4 percent to $6.2 billion due to weak exports to the U.S. Exports of petroleum products decreased by 20.9 percent to $3.6 billion, and petrochemical exports dropped by 20.8 percent to $3.2 billion. Meanwhile, agro-fisheries and cosmetics exports expanded by 5.5 percent and 9.3 percent, respectively, both reaching a record high of $1 billion.
Minister Ahn emphasized the government's commitment to minimizing the impact on export companies and maximizing national interest by clearly communicating South Korea's position on U.S. tariff measures to the Trump administration and seeking mutually beneficial solutions.