Seoul: South Korea's exports witnessed a 5.9 percent year-on-year increase in July, driven by a robust global demand for semiconductors, according to government data released on Friday. Despite the tariff policies of the U.S. administration, outbound shipments reached an unprecedented $60.8 billion for the month, marking the highest figure for any July, as reported by the Ministry of Trade, Industry and Energy.
According to Yonhap News Agency, imports saw a modest rise of 0.7 percent year-on-year to $54.2 billion, resulting in a trade surplus of $6.61 billion. Semiconductor exports, in particular, surged by 31.6 percent to $14.71 billion, setting an all-time high for any July. This surge was supported by an increase in memory chip prices and sustained demand for high-value products, including high bandwidth memory (HBM) chips and DDR5.
Seo Ga-ram, an official from the ministry, highlighted that the spike in chip exports was partly due to increased demand ahead of potential U.S. semiconductor tariffs. However, he projected that the sector would continue its strong performance throughout the year, bolstered by the expanding artificial intelligence (AI) market. Seo noted that even if tariffs were imposed, their impact on Korea's exports would be limited, given the high-value semiconductors manufactured by Korean companies.
In the automotive sector, exports rose by 8.8 percent to $5.83 billion, largely owing to strong performances in the European Union, Latin America, and the Commonwealth of Independent States. However, exports to the U.S. saw a decline of 1.7 percent, with electric vehicle shipments plummeting by 97.7 percent due to the U.S. administration's 25 percent tariffs on imported cars. Seo mentioned that a recent trade deal had reduced U.S. tariffs on Korean cars to 15 percent, aligning them with tariffs on cars from Japan and Europe.
Ship exports experienced a significant increase of 107.6 percent to $2.24 billion, marking the fifth consecutive month of year-on-year growth, driven by strong demand for high-value ships like liquefied natural gas tankers. Agro-fisheries and cosmetics exports also reached record highs for July, growing by 3.8 percent and 18.1 percent, respectively, amid the global popularity of Korean culture and food, as well as efforts to diversify export items.
Conversely, exports of petroleum and petrochemical products declined by 6.3 percent and 10.1 percent, respectively. Biohealth product exports decreased by 4.9 percent, with computer exports dropping 18.5 percent and display shipments falling by 9 percent. Machinery exports plummeted 17.2 percent due to U.S. tariffs, while steel exports contracted by 2.9 percent amid sluggish demand and 50 percent U.S. tariffs.
By destination, exports to the United States increased by 1.4 percent to $10.33 billion, although the country ranked third after China and the ASEAN in importing Korean goods. Shipments to the ASEAN region surged by 10.1 percent to $10.91 billion, driven by high chip demand. Exports to EU countries expanded by 8.7 percent to $6.03 billion, while those to CIS nations spiked by 21.5 percent to $1.22 billion. However, exports to China decreased by 3 percent due to weak demand for petrochemical products and wireless communications equipment.
Industry Minister Kim Jung-kwan emphasized that the trade deal with the U.S. positioned South Korea on equal or more favorable terms compared to its rivals, enabling Korean companies to compete effectively in the U.S. market. The government pledged to support companies in enhancing competitiveness and diversifying export destinations in the evolving trade landscape.