South Korea exports rebound on tech boost but US tariffs hit other sectors

By Jihoon Lee

SEOUL (Reuters) -South Korea's exports rebounded in June driven by strong tech demand, though shipments to the United States and China remained weak as Seoul warned that economic risks will persist through the remainder of 2025 due to uncertainty over U.S. tariffs.

Exports from Asia's fourth-largest economy, an early bellwether for global trade, rose 4.3% from the same month last year to $59.80 billion, data showed on Tuesday, marginally weaker than the median 4.7% rise tipped in a Reuters poll of economists.

In May, exports fell 1.3% for the first time in four months, as shipments to the U.S. and China dropped more than 8% each on downward pressure from U.S. President Donald Trump's tariff threats.

Shipments to the U.S. fell 0.5% last month, extending losses for a third consecutive month, while those to China were also down for a second month, dropping 2.7%. Exports to the European Union rose 14.7%, while those to Southeast Asian countries gained 2.1%.

"Volatility in U.S. tariff policy and economic recovery uncertainty are expected to persist in the second half," South Korean Industry and Trade Minister Ahn Duk-geun said, promising an all-out response to U.S. tariffs.

South Korea will seek an extension to the 90-day pause in U.S. tariffs that is set to expire next week, as negotiations are likely to continue past the deadline set between Seoul and Washington, a senior South Korean trade official said on Monday.

Trump has imposed high tariffs on various sectors, while a 25% "reciprocal" duty on South Korea is currently paused for negotiations. China, South Korea's biggest trading partner, is also in talks with the United States after they significantly lowered tariffs on each other's goods in a truce in mid-May and a framework deal last month.

"Optimism is growing around trade negotiations of major countries and tariffs are unlikely to be raised even more, though it is too early to say exports have bottomed out," said Lee Jeong-hoon, an economist at Eugene Investment.

South Korea's factory activity contracted for the fifth straight month in June, a separate survey showed on Tuesday, as weak demand in Japan, China and the U.S. countered improvements in domestic economic conditions.

Exports of semiconductors extended gains for a fourth straight month by rising 11.6% in June, but it was the slowest in the streak. Automobiles rose 2.3%, as robust electric-vehicle demand in Europe offset losses in U.S. sales, according to the ministry.

Steel products fell 8.0% and home appliances dropped 15.6% on U.S. tariffs, but car parts rose 2.4% as automakers were seen increasing local production in the U.S.

Imports rose 3.3% to $50.72 billion, bringing the monthly trade balance to a surplus of $9.08 billion, the biggest since September 2018.

(Reporting by Jihoon Lee; Editing by Muralikumar Anantharaman and Shri Navaratnam)