South Korea’s exports declined in the first half of 2025, as mounting U.S. tariffs on key goods — including steel and automobiles — weighed heavily on trade, with additional duties of up to 15 percent set to take effect next week.
According to data released Tuesday by the Ministry of Trade, Industry and Energy, exports fell 0.03 percent year-on-year to $334.7 billion from January to June.
While the drop appears slight, officials say the underlying trends are alarming, especially with heightened trade tensions expected to escalate further when a new round of U.S. tariffs begins July 8.
Exports to the United States fell 3.7 percent during the period, marking the first half-year decline since the onset of the COVID-19 pandemic in early 2020.
Steel shipments to the U.S. tumbled 11.2 percent after the Trump administration raised tariffs from 25 percent in March to 50 percent by June.
Auto exports were hit even harder, plunging 16.8 percent following the imposition of a 25 percent duty on Korean-made vehicles in April. General machinery exports dropped 16.9 percent amid sluggish investment in American industrial facilities.
“The tariff shocks are now showing up clearly in the numbers,” a senior trade ministry official said. “And the next wave could be even more disruptive.”
The looming tariffs — authorized under an executive order signed in March — will target a broad array of Korean goods not previously subject to levies. The U.S. granted a 90-day reprieve in April after financial markets reacted sharply to the initial announcement, but the White House has indicated it will allow the new tariffs to proceed starting next Monday.
The trade pressures come at a time of broader global uncertainty, with Korea’s exports to China also falling 4.6 percent and to Japan by 3.8 percent in the first half.
While steel and autos bore the brunt of the current tariff regime, one notable outlier has been the semiconductor sector.
Exports of chips to the U.S. surged 14.7 percent year-on-year to $73.3 billion, driven in part by stockpiling ahead of possible sanctions. Semiconductors accounted for 22 percent of Korea’s total exports, hitting a record monthly high of $15 billion in June.
South Korea and the U.S. held detailed negotiations in Washington from June 22 to 27, but failed to reach a breakthrough.
While the U.S. pushed for changes to Korean regulations — including the 30-month age limit on imported beef and restrictions on genetically modified products — Seoul argued that the new tariffs violate existing free trade agreements and could undermine decades of bilateral economic cooperation.
Forecasts for the rest of the year remain gloomy. The Korea International Trade Association projects exports will fall 3.8 percent in the second half, bringing the full-year total to $668.5 billion, down 2.2 percent from 2024. The Korea Institute for Industrial Economics & Trade offered a similar outlook of $670.6 billion, a 1.9 percent decline.
