Exports, a core pillar of the Korean economy, relatively smoothly weathered the wave of the tariff war originating from the U.S. that hit the country in the first half of this year. However, from July 9, the uncertainty of the 'reciprocal tariff' announced by U.S. President Donald Trump will be faced. Amid a general increase in uncertainty, voices have emerged stating that for the Korean economy to navigate through successfully, it must actively diversify its export pathways along with securing technological superiority.
According to the 'June 2025 Import and Export Trends' report released by the Ministry of Trade, Industry and Energy on the 1st, the export amount in the first half of this year was $334.7 billion, similar to the $334.8 billion in the same period last year. Considering the tariff war that broke out after the Trump administration took office, evaluations have emerged suggesting that this is a relatively decent performance.
In particular, the export amount in June was $59.8 billion, setting a record for the highest export amount in any June. The trade surplus for June reached a staggering $9.08 billion. This means that 32.6% of the $27.8 billion trade surplus for the first half was achieved in June.
However, the export performance in June reflects companies pushing their 'export volumes' ahead of the reciprocal tariff starting on July 9, as well as the effect of the end of the quarter. This indicates that there is a possibility of negative factors for exports in the second half.
The biggest contributor to the resilience in exports in the first half was semiconductors. The export amount for semiconductors in the first half of this year was $73.27 billion, an increase of 11.4% compared to the same period last year. This was $4.25 billion more than the previous record of $69.02 billion in the first half of 2022. An official from the Ministry of Trade, Industry and Energy noted, 'The export of high-value products such as DDR5 and High Bandwidth Memory (HBM) showed robust trends, and a rebound in the prices of key memory products led to the highest export amount on record for the first half.'
The biohealth sector also saw an increase in exports due to rising demand for biosimilars and contract manufacturing (CMO), with exports growing 11% compared to last year.
However, it is uncertain whether this trend will continue into the second half. This uncertainty arises as the U.S. is reviewing item-specific tariffs on semiconductors and biomedicals, which could lead to a sharp decline in exports to the U.S.
In fact, the automotive sector, hit hard by U.S. tariff measures, saw a 1.7% decrease in exports in the first half of this year compared to the previous year. Particularly, the export amount of automobiles to the U.S. during this period dropped by 16.8% to $15.34 billion compared to the same period last year. Exports of steel, another target of U.S. item-specific tariffs, also fell by 5.9% compared to the same period last year. An official from the Ministry of Trade, Industry and Energy noted, 'Exports declined due to the high tariff policy and market uncertainties from the U.S.'
Korea's export insecurity is clearly shown in the export performance by region. Exports to the two key regions, the U.S. and China, decreased by 3.7% and 4.6%, respectively, compared to last year.
Director General Seo Ga-ram noted, 'When looking at exports to China as a mid- to long-term trend, there is a decrease,' adding, 'China is currently unable to activate its domestic market, and it is producing our main export items such as semiconductors itself.' Director General Seo added, 'While the U.S. market is facing challenges due to tariff imposition on automobiles, our corporations are making significant efforts to maintain market share,' stating that 'internally, they are also enduring a decrease in revenue.'
Fortunately, the decrease in exports to the U.S. and China was compensated by the European Union (EU) and ASEAN regions. Exports to the EU recorded $34.9 billion, an increase of 3.9% compared to the same period last year. Among the items, automobile exports showed strong performance. As preference for Korean eco-friendly cars increased, automobile exports rose 16% compared to the same period last year. Ship exports also increased by 34.9% compared to the same period last year.
Exports to ASEAN recorded $57.61 billion, an increase of 3.8% compared to the same period last year. The effect of our corporations relocating their production facilities from China to ASEAN significantly boosted semiconductor exports (+37.9%). In addition, exports to Taiwan ($19.06 billion, +55.7%), India ($9.22 billion, +2.1%), and CIS ($6.24 billion, +18.5%) also showed strong performance.
Director General Seo commented on the export performance in the first half, saying, 'It performed admirably in a situation where a decline was expected,' and added, 'We achieved better-than-expected performance in semiconductors, bio, and ship sectors, and our corporations fought hard to not lose market presence.'
The problem lies in the second half. As the Korea-U.S. tariff negotiations are delayed, the timing for implementing the reciprocal tariff by the U.S. is approaching. President Trump hinted at no intention to postpone the reciprocal tariff during an interview with Fox News, which was made public on the 20th of last month (local time), stating, 'What I intend to do is send letters to 200 countries around the world containing the details of the tariff increase.'
President Trump also expressed a negative stance on any moves to lower item-specific tariffs on automobiles and steel. In the interview, when asked about concerns from U.S. automobile manufacturers that 'Japan and Korea are entering into agreements that apply lower tariffs than the U.S.,' he stated, 'That will not happen because I set the tariff.'
Export companies' expectations for exports are also declining. According to the '2025 3rd Quarter Export Industry Outlook Survey (EBSI)' report released by the Korea International Trade Association the previous day, the EBSI for the 3rd quarter this year is 96.3, falling below the baseline of 100 for the third consecutive quarter.
Yang Ji-won, a senior researcher at the Korea International Trade Association, stated, 'Since the launch of Trump’s second term, global uncertainty has expanded, and the economic slowdown in major countries is freezing the sentiment of our export companies,' noting, 'Uncertainties are rising not only for items directly affected by tariffs, such as home appliances and automobiles, but also for strategic items like semiconductors. It is a critical time that calls for proactive measures and efforts to diversify markets.'