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South Korea's Exports Drop 23.8% in Early May, Triggering Fresh Economic Concerns

Trade deficit widens as export-dependent economy faces U.S. tariffs and declining global demand, prompting policy adjustments and diversification efforts.

Containers are stacked at a port in the city of Pyeongtaek, Gyeonggi Province, in this April 9, 2025, file photo. (Yonhap)

Overview

  • South Korea's exports fell 23.8% year-on-year in the first 10 days of May, totaling $12.83 billion, according to Korea Customs Service data.
  • Imports during the same period declined 15.9% to $14.57 billion, resulting in a $1.7 billion trade deficit.
  • This sharp decline follows a 3.7% year-on-year export growth in April, highlighting the volatility of the trade sector.
  • The government is implementing fiscal stimulus measures and the Bank of Korea has signaled potential interest rate cuts to support economic recovery.
  • Efforts to reduce reliance on U.S. markets include expanding exports to China, ASEAN, and other regions to mitigate risks from trade tensions.