South Korea’s Exports Surge 3.7% in April Despite U.S. Tariffs

   By Favoredjane

South Korea’s exports showed strong resilience in April, climbing 3.7% year-on-year to reach $58.21 billion, beating market expectations and posting the largest percentage gain in four months. This growth exceeded both the 3.0% rise seen in March and the 2.0% decline forecasted by economists in a Reuters poll, who had anticipated the impact of U.S. tariffs would weigh heavily on South Korea’s export performance.

The April export increase came despite the ongoing trade tensions with the United States, following President Trump’s decision to impose 25% tariffs on steel imports in March and additional duties on auto imports in early April. These tariffs have triggered concerns about the negative impact on South Korean exports, which are heavily reliant on sectors such as automobiles and semiconductors. However, the growth was driven by a combination of factors, including a rebound in exports to China and a surge in demand for high-end chips.

Shipments to China rose 3.9%, with chips and other electronic components playing a pivotal role. In contrast, exports to the U.S. dropped 6.8%, reflecting the immediate impact of Trump’s tariff policies. Nonetheless, shipments to the European Union surged 18.4%, reaching a record high of $6.7 billion. This was seen as a positive sign for South Korea’s broader export diversification efforts, as the EU continues to be an important trade partner.

“Global demand for chips, particularly high-end chips, has been stronger than expected,” said Kang Min Joo, an economist at ING. “This stronger-than-anticipated demand likely helped offset some of the negative effects from the U.S. tariffs,” he added. Despite this, Kang predicts a potential slowdown in exports during the second quarter due to ongoing global uncertainties and trade friction.

In response to the trade challenges, South Korea and the U.S. are currently working on a trade package aimed at eliminating new tariffs before reciprocal tariffs are reinstated in July. The 90-day pause on higher tariffs, including the 25% duties on South Korean goods, has provided a window of relief, as both countries negotiate terms to avoid further escalation.

While South Korea’s export growth in April is encouraging, analysts remain cautious about the longer-term effects of tariff impositions and the global economic environment. With a large portion of South Korea’s exports tied to semiconductors and autos, the evolving trade dynamics, particularly with the U.S. and China, will continue to shape the country’s economic outlook in the months ahead.