By Jihoon Lee
SEOUL (Reuters) – South Korea’s exports are expected to have fallen in May for the first time in four months, as the impact of U.S. President Donald Trump’s tariffs offset strong demand for semiconductors, a Reuters poll showed on Thursday.
Exports out of Asia’s fourth-largest economy are forecast to have fallen 2.7% this month from a year earlier, according to a median of 16 economists. That would be the first year-on-year decline since January.
South Korea – the first major exporting economy to report trade figures each month – is scheduled to release data for May on Sunday, June 1, at 9 a.m. (0000 GMT).
In April, exports unexpectedly rose 3.7%, even as U.S.-bound shipments dropped 6.8%. Robust chip sales, especially those of high-end products for artificial intelligence, offset declines in cars hit by Trump’s tariffs.
“Semiconductor exports have been stronger than expected in May, but that might be due to advance orders amid worries about U.S. tariffs on chip imports,” said Chun Kyu-yeon, an economist at Hana Securities.
In the first 20 days of this month, exports fell 2.4%, with shipments to the U.S. dropping 14.6% and those to China declining 7.2%.
Trump has imposed 25% duties on imports of automobiles and steel products and suggested more duties on semiconductors and pharmaceuticals. His reciprocal tariffs announced in early April, including 25% levies on South Korea, are currently on pause for negotiations, except the 10% baseline.
In May, Washington and Beijing agreed to pause their trade war by unwinding most of the tariffs on each other’s goods for 90 days.
“What is concerning is that we are seeing declines in exports not only to the United States, but also to China, suggesting a slowdown in global trade,” said Stephen Lee, an economist at Meritz Securities.
Lee expects South Korea’s exports to fall in the second quarter, after they declined for the first time in 1-1/2 years in the prior quarter.
“It is still too early to declare a clear easing of tariff risks,” said Oh Suk-tae, an economist at Societe Generale, noting uncertainty around the July 9 and August 12 deadlines for the 90-day pause on reciprocal tariffs and a truce with China.
South Korea’s imports are projected to have fallen 3.1% in May, after dropping 2.7% in April, according to the survey conducted on May 19-28.
The median estimate for the country’s trade balance stood at a surplus of $4.61 billion, compared with $4.88 billion in the previous month.
(Reporting by Jihoon Lee, Polling by Devayani Sathyan and Pranoy Krishna in Bengaluru; Editing by Shri Navaratnam)
