In one of world’s first trade figures for April to come out after Trump ratcheted up his tariff campaign, the value of South Korean shipments adjusted for working-day differences fell 5.2% from a year earlier in the first 20 days of April, according to data released Monday by the customs office. That compared with a 5.5% rise reported earlier for the full month of March.
It showed outbound shipments to the US and China were down 14.3% and 3.4%, respectively, while exports to the European Union and Taiwan were up 13.8% and 22%.
The data will be closely watched for clues on how Trump’s new levies are playing out in the real world. A raft of other data this week including purchasing manager indexes from Japan to Europe to the US, will shed more light on the impact of Trump’s trade war.
After hiking duties on imports of metals in March, Trump imposed a 25% tariff on auto imports and a 10% levy on all other shipments earlier this month. The slowing momentum for exports underscores the risks to South Korea’s export-driven economy from Trump’s protectionist policies.
Auto exports dropped 6.5% from a year earlier in the first 20 days of April, while semiconductor shipments were up 10.7%. Steel exports declined 8.7% and sales of oil products sank 22%.
South Korean officials have said they are looking to cut a “big” trade deal in talks with the US but it’s unclear how quickly an agreement can be reached as they prepare to elect the country’s next leader on June 3. Industry Minister Ahn Duk-geun and Finance Minister Choi Sang-mok will travel to Washington this week to kick start trade negotiations.
With working days unchanged from last year, exports fell 5.2% while overall imports decreased by 11.8%, resulting in a trade shortfall of $100 million.
South Korea is the US’s sixth-biggest trading partner, with the Asian country’s surplus jumping about 25% in 2024 from the previous year to about $55.7 billion, a factor that Trump focused on when deciding so-called reciprocal levies.
The auto tariff presents a real threat to South Korean automakers since the US accounted for nearly half of the nation’s $70.8 billion worth of vehicle exports in 2024, according to government data. Automobiles and auto-parts are among South Korea’s biggest export items to the US.
If the Trump administration decides to press ahead with plans to impose tariffs on semiconductor imports, it could further hurt the South Korea industry that has been a bedrock of the country’s export-led economy.
The Bank of Korea decided to keep its benchmark interest rate steady at 2.75% last week even as it cited a significant increase in downside risks to growth due to trade policies.
“The overall exports momentum is weak with growth slowing in April due to deteriorating trade conditions after expanding slightly in March,” Governor Rhee Chang-yong said in a post-decision press conference.
The bank said growth weakened more than expected due to the impacts of US trade policy and domestic political uncertainty, warning that the economy could see negative growth in the first quarter.
