South Korea’s Export Growth Slows to 14-Month Low Amid U.S. Tariff Uncertainty

South Korea’s export growth in November is expected to have reached its weakest level in 14 months, continuing a four-month slowdown, according to a Reuters poll. Economists cited declining demand in the United States, driven by trade policy uncertainties under the incoming Trump administration, as a major factor impacting outbound shipments.

Declining Export Growth

Exports are forecast to have increased by just 2.8% year-on-year in November, a slowdown from the 4.6% rise recorded in October. This marks the 14th consecutive month of export growth, but the smallest gain during the streak. The slowdown is attributed to weaker demand for goods beyond semiconductors, including automobiles and IT products.

“Non-semiconductor exports, particularly auto sales to the U.S., are slowing, while IT demand is gradually weakening,” said Chun Kyu-yeon, an economist at Hana Securities.

Impact of U.S. Tariff Policies

U.S. President-elect Donald Trump has pledged to impose significant tariffs on imports from Canada and Mexico. These policies are expected to create a challenging environment for South Korean manufacturers reliant on U.S. demand.

In the first 20 days of November, South Korea’s exports rose by 5.8%, supported by a jump in semiconductor shipments. However, automobile exports declined, and shipments to the U.S. fell by 2.5%, marking the first drop since July 2023. Meanwhile, exports to China grew by 3.5%.

Economist Lee Seung-hoon of Meritz Securities stressed the importance of U.S. manufacturing recovery, stating, “A recovery in U.S. manufacturing activity will be critical for broader strength across South Korea’s export sectors.”

Trade Outlook

The survey forecast a modest 0.4% rise in imports for November, compared to a 1.7% increase in October. The trade balance is projected to show a surplus of $5.15 billion, a significant increase from October’s $3.15 billion.

While the semiconductor sector has remained a strong performer, other sectors’ weaknesses could weigh on South Korea’s economic growth prospects. “The semiconductor rebound offers some comfort, but it will be overshadowed by broader export sector challenges,” noted Oh Suk-tae, an economist at Société Générale.

South Korea’s official trade data for November will be released on Sunday, December 1, at 9 a.m. local time.