Korea's exports are expected to decrease by 2.2% this year compared to last year as the country continues to experience a more sluggish trend in exports in the second half of this year.
According to the report titled “Evaluation of Exports and Imports in the First Half of 2025 and Outlook for the Second Half,” released by the Korea International Trade Association (KITA) on the 22nd, exports in the second half are expected to drop by 3.8% compared to the previous year, reaching $335.5 billion, while imports are projected to decrease by 2.1% to $313.2 billion.
KITA noted, "The impact of tariffs from the United States will be visible in most major items such as automobiles, general machinery, and steel," and predicted, "Annual exports this year will amount to $668.5 billion, a decrease of 2.2% from last year."
Originally, KITA had projected in its report from November last year titled “Evaluation of Exports and Imports in 2024 and Outlook for 2025” that this year’s exports would increase by 1.8% compared to last year, reaching $697 billion. The outlook has now shifted from 'increase' to 'decrease.'
Imports are expected to decrease by 1.8% this year, amounting to $620.2 billion. The trade balance is estimated to be slightly reduced to $48.3 billion compared to last year.
The report forecasts that, by item, South Korea's largest export product, semiconductors, saw an increase in exports in the first half to $72.7 billion, up 10.6% from last year, while exports in the second half are expected to decline by 5.1%, resulting in a total annual increase of only 2.2%.
Although demand for high-performance AI semiconductors will remain strong due to growth in the artificial intelligence (AI) industry, it is analyzed that demand for general IT devices such as PCs and smartphones has weakened, and the prices of memory chips such as DRAM will stagnate, leading to a decline in revenue.
The 'export hero' automobile is also expected to see a decline of 2.4% in the first half due to the prolonged electric vehicle chasm and an increase in the share of overseas production and sourcing, with a projected decline of 7.1% in the second half. Annual exports are predicted to decrease by 4.6%.
In terms of steel exports, the increase in import tariffs by the United States and the strengthening of trade remedy measures centered around the European Union (EU) and India are expected to exacerbate export sluggishness, with a projected decline of 4.8% in the first half and 7.2% in the second half. Total annual exports are anticipated to decrease by 6.0%.
Additionally, exports of petroleum products are expected to fall by 19.2% in the second half, resulting in an annual decrease of 19.5%, while the petrochemical sector is expected to decline by 4.1% in the second half and 7.6% annually, alongside other projections indicating a decrease in the second half for 9 out of the 13 major items.
However, exports of displays (6.5%·-2.2%) are anticipated to show some recovery due to the adoption of low-temperature polycrystalline oxide (LTPO) panels by all models of the iPhone 17 series, while exports of ships (0.9%·7.9%) are expected to maintain growth as high-value ship deliveries begin to ramp up.
Meanwhile, in a survey conducted by KITA targeting export corporations from the 9th to the 11th, 64.8% reported that they suffered damages due to the United States' tariff measures.
In particular, sectors such as automobiles and parts (83.7%) and steel, metals, and minerals (82.9%), which have been subject to high tariffs, reported significant damage. In the case of automobile and parts corporations, 37.2% indicated that export companies bear the full cost of tariffs, while 24.4% of steel, metals, and minerals reported delays and cancellations in contracts.