South Korea Exports Rise Despite U.S. Tariffs in August

 

South Korea’s exports rose 1.3 percent year-on-year in August 2025, marking the third straight monthly increase, driven largely by semiconductor and automobile shipments.

Adjusted for working days, exports were up 5.8 percent, consistent with July. Meanwhile, imports declined 4 percent, resulting in a US$6.5 billion trade surplus. The growth comes despite the U.S. imposing a new 15 percent tariff on South Korean imports, ending decades of tariff-free trade. The Bank of Korea Governor, Rhee Chang Yong, said chip and auto exports exceeded expectations, prompting a 0.2 percentage point upward revision to this year’s GDP growth forecast.

Key Highlights

• Exports rose 1.3 percent in August, led by chips and autos
• U.S. tariffs drive front-loaded shipments, masking risks
• Trade surplus hits $6.5B, but growth outlook remains cautious

However, he warned the tariff effects could worsen over time, with the central bank maintaining its 2026 growth outlook at 1.6 percent. South Korea’s economy is highly export-dependent, with exports accounting for 40 percent of GDP today, compared to 85 percent in 2008. By contrast, most developed economies rely on exports for only 20–30 percent of GDP. The U.S. remains a critical market, absorbing $128.37 billion in South Korean exports in 2024, nearly 19 percent of the total. This heavy concentration, particularly in autos and metals, makes South Korea vulnerable to targeted tariffs.

Also Read: Asian Exporters Recoil as New US Tariffs Take Effect

Recent strength in shipments is partly artificial. Companies have been front-loading exports to beat tariff deadlines, leading to a 30 percent surge in semiconductor exports and a 22 percent jump in auto exports in the first 20 days of August. Analysts warn this momentum may fade, as once accelerated shipments are completed, export volumes typically dip, reflecting underlying trade challenges.