South Korea’s Exports Sputter as Risks Rise in Chips and Tariffs

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(Bloomberg) – South Korea exports lost growth momentum in February with weakening the demand for semiconductor and officials to involve the United States in the hope of avoiding a blow from the Donald Trump tariff campaign.

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The value of the modified shipments of the differences on the working day decreased by 5.9 % from the previous year, according to the data issued by the customs office on Saturday. This is compared to an increase of 7.7 % initially mentioned for the month of January.

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Despite the working days more than last year, unjustified exports grew by only 1 %, compared to expansion expectations by 3.7 % by economists in Bloomberg Survey. The total imports increased by 0.2 %, which led to a trade surplus of $ 4.3 billion.

Semiconductor shipments decreased by 3 % from the previous year, which represents the first decline since late 2023, with the decrease in the prices of traditional memory chips, according to the Ministry of Trade. The semi -conductors are the largest driver for South Korea profits from abroad.

With an economy that is largely dependent on trade, South Korea is among the countries most vulnerable to protectionist policies. Trump's plans to escalate customs tariffs and restore more production to the United States are a threat to a group of South Korean companies deep in global supply chains, including Samsung Electronics Co. , And car manufacturers such as Hyundai Motor Co.

Acting President Choi Sang Mok spoke on Friday with US Treasury Secretary Scott Beesen and asked Washington to take into account the contributions of South Korea to the US economy when policies are gathered, including mutual definitions that have been marked by Trump. Anne Duk-John, Minister of Trade, Industry and Energy with Minister of Trade Howard Lottenic and two, agreed to form work groups to discuss charges and cooperation in shipbuilding, according to his ministry on Saturday in a statement.

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Last month, Trump signed a procedure to consider the new fees on the basis of each country separately, and Lootnick said that all studies should be completed by the first of April. The US President also requested a 25 % tariff on steel imports and floats on the idea of ​​accusations on semiconductors, car industries, and the main drivers of the South Korean economy.

Chey Tae-Won, head of the SK Group, which includes a memory resource for NVIDIA Corp, led a delegation of business managers in the United States last month, where he meets with policymakers and legislators who can help South Korean companies to put them better before Trump's commercial policies enter into force.

“The exports have prevented the economy from slipping into the recession in the last quarters, and the mutation in artificial intelligence should maintain advanced memory chips,” said Dave Chia, an economist in Moody's analyzes. “However, the slowdown in other major categories and new definitions in the United States after the recent change in management to reduce export growth.”

The United States is the first South Korean ally and provides security guarantees against North Korea. Its imports have increased from the Asian nation in recent years, making Seoul more vulnerable to definitions from the United States. China, the largest commercial partner of South Korea, is also preparing for increasing tensions with the United States.

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The commercial risks increased as President Yun Suk Yol's declaration of martial law in December led to consumer confidence. Yun was later isolated and arrested on charges of rebellion, and the court retracted whether he will be expelled permanently or returned to his position.

Prime Minister Han Dac Soo has also been isolated by a parliament led by the opposition, and since then the Finance Minister has led the government. In this role, Choi was negotiating additional budget details that could help prevent additional slowdown in economic momentum.

The South Korea's opposition Democratic Party has suggested formulating an additional budget plan of 35 trillion ($ 24 billion) as it tries to put itself as stirring support measures. Meanwhile, Korea Governor Rai Chang Young suggested that their value ranged between 15 trillion Won and 20 trillion Won.

BOK last month reduced the record interest rate to support the economy while reducing its economic expectations for this year to calculate concerns about commercial risks, slow consumption and local political turmoil. The central bank took this step even when it was cautious about the risk of putting more downward pressure on the local currency. Weak performance in Asia last year, Won achieved great success from Trump's protective pledges.

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