South Korea's robust semiconductor exports continue to overshadow weaknesses in other sectors, sustaining overall shipment growth in early December as the country navigates U.S. tariff impacts.
Customs data released Monday showed exports rose 3.6% year-on-year in the first 20 days of December after adjusting for working-day differences, slowing from an 8.2% pace in the same period last month. For full November, revised export growth stood at 13%. Unadjusted export volumes climbed 6.8%, while imports edged up 0.7%, yielding a $3.8 billion trade surplus.
Semiconductor shipments surged nearly 42%, extending their AI and data center-driven recovery. Wireless communications equipment exports jumped 18%. These gains offset declines elsewhere—auto exports dropped 13%, while petrochemicals struggled with higher input costs and U.S. protectionist measures.
By destination, exports to China grew 6.5%, but U.S.-bound shipments fell 1.7%.
"Excluding semiconductors, the data remains weak, underscoring the sector's outsized role," said Barclays economist Bumki Son. "We must remain alert to risks that monetary policy may not be neutral for most non-semiconductor sectors."
In late November, the Bank of Korea (BOK) abandoned its explicit easing bias, holding rates at 2.5% and raising its 2026 growth forecast to 1.8% on strong exports and steady consumption. However, Governor Rhee Chang-yong noted improved projections relied heavily on chips and IT.
Barclays expects 2.1% export growth in 2026, but just 1.1% when stripping out semiconductor-related trade and investment. This widening divergence complicates BOK policymaking, exacerbated by a weak won and Seoul's frothy property prices.
After three months of talks, Seoul and Washington agreed in October to cap U.S. tariffs on Korean goods at 15%. Earlier this month, the U.S. formally published the terms, retroactively cutting auto tariffs to 15% from November 1. While lower than Trump-era rates, these remain well above previous FTA levels.
The trade data comes as the won has depreciated over 8% against the dollar since mid-2025, fueling inflation concerns. With both headline and core CPI exceeding the BOK's 2% target, policymakers warn prolonged currency weakness could further lift import costs.
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