South Korea’s exports returned to growth on the back of continuing demand for semiconductors, in a positive sign for policymakers seeking to shore up the trade-reliant economy against any potential headwinds from US president-elect Donald Trump’s tariff plans.
Exports adjusted for working-day differences rose 3.6 percent last month from a year earlier, rebounding from a dip in the prior month, data from the South Korean Ministry of Trade, Industry and Energy showed yesterday. Headline exports climbed 1.4 percent while imports decreased 2.4 percent, resulting in a trade surplus of US$5.6 billion.
Semiconductor exports increased 30.8 percent from a year earlier to US$12.5 billion, the trade ministry said. Still, it was the slowest growth since late last year.
Photo: REUTERS
South Korea is one of the world’s most export-reliant nations, and its vulnerability to protectionism has raised concerns among policymakers and business leaders in Seoul after Trump vowed to increase tariffs on trading partners.
While South Korea might be subjected to universal tariffs of just 10 percent, it could also sustain indirect damage from larger duties targeting some of its key trading partners. Trump has pledged 60 percent charges for China, South Korea’s biggest trading partner.
The Bank of Korea on Thursday slashed its benchmark interest rate in a surprise back-to-back move aimed at girding the economy for any potential headwinds stemming from Trump’s return to the White House next month.
The central bank has already voiced concerns about a softening in the export growth of technology products. South Korea is home to two of the world’s biggest memory chip manufacturers, and its businesses are widely embedded across global technology supply chains.
“Trump’s return to the White House suggests a tumultuous period lies ahead, with higher US tariffs and fresh US-China trade frictions impairing the smooth flow of goods and the functioning of supply chains,” Dave Chia, an associate economist at Moody’s Analytics, said in a note. “As a key US and China trading partner, South Korea could be caught in the middle.”
Demand from both China and the US slipped last month. Shipments to China edged down 0.6 percent from a year earlier while those to the US fell 5.1 percent, the trade ministry said.
Separately, South Korea has the capacity to purchase more US energy, which is competitive in cost with Middle East imports, Yonhap News yesterday cited Minister of Trade, Industry and Energy Ahn Duk-geun as saying.
Ahn told Yonhap that the country needs to expand US imports to reduce trade surplus with the US and plans to fold it into policy “constructively,” while private companies can take it into consideration as part of their business strategies.
The minister’s comments suggest South Korea will seek to encourage US energy imports through government-run firms and private refiners, Yonhap said. US gas and oil prices are “reasonable,” making it easier for South Korea to procure them, Ahn told Yonhap.
During Trump's election campaign, he vowed to narrow trade deficits with other countries through tariffs and increase US oil and gas production to establish what he called energy dominance.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort