Exports grow in July on strong chip demand despite tariff uncertainties

Despite trade uncertainties, South Korea's exports managed to stay in the black in July, coming to a record high for any month of July.

Our correspondent Moon Ji-young has this report.

South Korea's exports rose for the second consecutive month in July thanks to robust demand for chips, automobiles, and ships, despite the impact of U.S. tariffs.

According to the Ministry of Trade, Industry and Energy on Friday, the value of exports last month amounted to over 60-point-8 billion U.S. dollars, up nearly 6 percent compared to the previous year.

This marked the highest-ever for any July,

setting record figures for the second consecutive month.

The main contributor to this growth was semiconductors, the country's top export engine.

Outbound shipments of chips rose more than 31 percent year-on-year, setting a record high for any July, backed by an increase in fixed prices of memory chips and strong demand for high-value products such as HBM and DDR5.

"It seems true that there were movements to pre-secure inventory in areas like semiconductors and bio products before tariff impositions. Even if the increase in chip exports was initially due to advance purchases, the current trend appears to be driven by robust demand, and we expect exports will not suddenly drop."

He added that the sector is expected to deliver a strong performance throughout the year on the growth of the AI market, since Korean companies manufacture high-value chips that U.S. firms cannot make.

In terms of automobiles, outbound shipments rose nearly 9 percent, thanks to strong performances in the EU, Latin America, and the CIS.

But auto exports to the U.S. dropped more than 1 percent, with shipments of EVs plummeting nearly 98 percent, due to U.S. tariffs.

The trade ministry says the Korean auto industry avoided the worst-case scenario with Thursday's trade deal between Seoul and Washington, which reduced U.S. tariffs on Korean cars to 15 percent from 25 percent, the same rate for cars from Japan and Europe.

Ship exports spiked, marking the fifth consecutive month of year-on-year increases, driven by robust demand for high-value ships, such as LNG tankers.

On the other hand, machinery exports plunged more than 17 percent, and steel exports dropped nearly 3 percent, due to U.S. tariffs.

Regionally, exports to the U.S. went up more than 1 percent, but it marked the first time, at least since the start of last year, that the country came in third place after China and ASEAN.

While exports to the EU, India, and CIS nations rose, those to China dropped 3 percent on sluggish demand for petrochemical products and wireless communications equipment.

Imports grew nought-point-7 percent to 54-point-2 billion dollars, resulting in a trade surplus of 6-point-6-1 billion dollars.

Moon Ji-young. Arirang News.