Strong semiconductor demand offsetting pressure from automobile tariffs, South Korea's early November exports grew by 8.2%.

Noticeably, South Korea's export volume continued to grow in the first 20 days of November, mainly due to strong demand for semiconductors, despite the high tariffs imposed by the United States on automobiles putting pressure on trade growth momentum. Data released by the South Korean customs on Friday showed that after adjusting for differences in working days, the export volume in the first 20 days of November increased by 8.2% year-on-year. This growth rate is lower than the 14% increase for the full month of October. The unadjusted export volume also grew by 8.2%, while the total import volume increased by 3.7%, resulting in a trade surplus of $2.4 billion. South Korea's exports remain stable Semiconductor exports grew by nearly 27%, continuing to recover due to the demand for artificial intelligence and data centers. Automobile exports also grew by 23%, while petrochemical and steel products struggled to maintain growth momentum due to weak demand and stricter protectionist measures from the United States. After three months of negotiations, the United States and South Korea reached a milestone tariff agreement last month, capping the US tariffs on South Korean goods at 15%. However, the 25% tariff on automobiles is still in place for now. It is expected that once the legislation related to the $350 billion US investment agreement is submitted to Congress later this month, the tariff rate will retroactively decrease to 15% from November 1. South Korean President Lee Jae-myung previously stated that the final agreement involved tense negotiations on national security issues such as nuclear fuel enrichment and submarines. While South Korea has secured an agreement with the United States to limit tariffs on its goods, the rates are still much higher than what South Korea enjoys under the free trade agreement. However, this formal trade agreement is expected to bring greater stability and help restore confidence among manufacturers. Exports account for over 40% of South Korea's GDP. By destination, exports to the United States grew by 5.7%, to China by 10.2%, and to the European Union by 4.9%. Exports to Singapore and India decreased by 21.3% and 6.5% respectively. These data provide the latest insight into South Korea's export situation ahead of the Bank of Korea's policy meeting on November 27. Some economists expect the central bank to keep interest rates unchanged as the committee monitors the lagging effects of the US-Korea agreement, while also being cautious of domestic household debt and real estate risks.