South Korea’s exports rose 1.3% year-on-year in August, driven by semiconductor and auto shipments, according to customs data released September 1, 2025.

Exports had climbed 5.8% in July, and the August figure marks a third consecutive monthly rise.

Working-day adjusted exports were up 5.8% in both July and August.

Imports dropped 4% in August, resulting in a trade surplus of US$6.5 billion.

The rise comes despite the US imposing a new 15% tariff on South Korean imports, ending decades of tariff-free trade between the two countries.

Bank of Korea Governor Rhee Chang Yong said chip and auto exports had exceeded expectations, raising this year’s GDP growth forecast by 0.2 percentage point.

Rhee also warned that tariff effects could worsen over time, and the central bank maintained its 2026 growth outlook at 1.6%.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ South Korea’s extreme export dependency creates unique tariff vulnerability

South Korea’s economy relies more heavily on exports than most developed nations, making trade disruptions particularly damaging.

The country’s exports reached 85% of GDP in 2008 and still constitute around 40% of the economy today23. This compares to most developed economies where exports typically represent 20-30% of GDP.

This export orientation explains why the Bank of Korea projects the 15% U.S. tariff will reduce GDP growth by 0.6 percentage points in 202645. For context, South Korea exported $128.37 billion worth of goods to the U.S. in 20246, representing nearly 19% of its total exports of $683.13 billion7.

The vulnerability extends beyond just volume. South Korea ranks first among nations in U.S. import exposure for automobiles and fifth for metals8. This concentration in specific sectors means that targeted tariffs can have significant economic impacts.

2️⃣ Front-loading shipments provides temporary buffer against tariff impacts

South Korean companies are rushing exports ahead of higher tariffs, creating artificial strength in current trade numbers that masks underlying challenges.