SEOUL — South Korea’s export growth in August slowed more than markets had anticipated, as tariffs sent US-bound shipments tumbling to their sharpest decline since the COVID-19 pandemic, trade data showed on Monday.
Exports from Asia’s fourth-largest economy, an early bellwether for global trade, rose 1.3 percent from the same month last year to $58.40 billion, weaker than a 3.0 percent increase tipped in a Reuters poll of economists.
It was the third consecutive month of year-on-year increases, led by robust chip sales amid a boom in artificial intelligence technologies, but much slower than July’s growth of 5.8 percent and the weakest in the streak.
In late July, Seoul reached a trade deal with President Donald Trump, which set US tariffs on imports from the Asian ally at 15 percent, on par with Japan and the European Union.
The tariff of 15 percent, lower than a threatened 25 percent but higher than the baseline 10 percent that had been in place, came into effect on August 7.
Shipments to the US fell 12.0 percent, the biggest drop since May 2020, dragged down by automobiles, machinery and steel. But exports of semiconductors and wireless communication devices, currently exempt from tariffs, grew.
“The decline in August was even sharper due to the effect of front-loading before ‘reciprocal tariffs’ kicked in,” Park Sang-hyun, an economist at iM Securities, said, referring to Trump’s country-specific tariffs.
“Although it is inevitable that US exports will continue to decline, the pace is unlikely to worsen further,” Park said, adding that the 15 percent tariff does not put Korean products at a huge disadvantage against rivals.
A separate survey for August released on Monday showed South Korea’s factory activity weakened for the seventh consecutive month, as export orders fell at the steepest pace since April, when Trump first introduced 10 percent baseline tariffs on all imports.
The government will prepare policy measures in early September to help tariff-hit exporters, such as steps to boost domestic demand, diversify markets andimprove competitiveness, Industry Minister Kim Jung-kwan said after the data release.
The Bank of Korea warned last week of a “significant” economic shockfrom higher US tariffs even after a trade deal, citing comparably steeper tariff hikes versus rival exporters and high exposure to product-specific duties.
Exports to China also fell 2.9 percent in August, but those to Southeast Asia jumped 11.9 percent. Shipments to Taiwan surged 39.3 percent on strong chip demand.
Total exports of semiconductors rose 27.1 percent, while auto and ship exports rose 8.6 percent and 11.8 percent, respectively. Petroleum and petrochemical products, however, dropped 4.7 percent and 18.7 percent each on price declines.
