South Korea’s Export Decline Amid U.S. Tariff Uncertainty

By Jihoon Lee

SEOUL (Reuters) – South Korea’s exports are anticipated to have dropped for the first time in 16 months due to U.S. tariff uncertainty and a decelerating tech sector, according to a Reuters poll, highlighting risks for trade-reliant economies from the Trump administration’s policies.

Outbound shipments are forecasted to decrease 13.5% this month compared to the previous year, following a 6.6% gain last month, based on a median of 18 economists in a Reuters poll released on Friday.

This drop marks the first year-on-year decline since September 2023, coinciding with signs of slowing growth momentum in recent months amid uncertainty regarding U.S. tariff policies.

> “Last month, exports expanded on front-loaded shipments of semiconductors and computers before anticipated tariffs, influencing this month’s performance,” said Ha Keon-hyeong, an economist at Shinhan Securities.

U.S. President Donald Trump has vowed to impose stringent tariffs on significant trading partners, including Mexico, Canada, and China, which are expected to impact South Korean firms operating in those nations.

The projected double-digit percentage decline in Korean shipments for the month would represent the largest drop in 1.5 years, compounded by unfavorable calendar effects from four holidays this week, economists noted.

Monthly data from Asia’s fourth-largest economy often experiences fluctuations in January and February due to the timing of Lunar New Year holidays, which affects annual comparisons with working days.

In the first 20 days of January, exports had already fallen 5.1%, with shipments to the United States and China decreasing 9.6% and 4.9%, respectively.

“This might raise concerns about Korea’s export outlook, especially with the potential for turbulent waters due to U.S. trade tariffs under Trump’s administration, alongside a slowing IT cycle,” stated Park Chong-hoon, an economist at Standard Chartered, commenting on early data.

Earlier on Friday, South Korea’s chip giant, Samsung Electronics, forecasted its first-quarter earnings would be limited by poor memory chip business conditions, expecting a market recovery in the second quarter.

The survey also indicated imports declining 9.9% in January, marking the most significant drop in 10 months, following a 3.3% rise in December.

The median estimate for the monthly trade balance indicates a deficit of $1.28 billion, marking the end of 19 consecutive months in surplus. In the previous month, South Korea reported a trade surplus of $6.49 billion, a six-month high.

As the first major exporting economy to provide monthly trade figures, South Korea is set to release January data on Saturday, Feb. 1, at 9 a.m. (0000 GMT).