Merchandise trade surplus widens in September

Latest reading: In September, the trade balance rose to USD +9.6 billion, up from USD +6.5 billion in the previous month. Over the last 12 months, the trade balance totaled USD +65.7 billion. Exports rose 12.7% in year-on-year terms in September, accelerating from a downwardly revised 1.2% rise in the previous month and far exceeding market expectations. Exports posted their strongest growth in over a year, lifted by booming semiconductor sales—the country’s top export item—and solid demand for cars and ships. Looking at destinations, shipments to China rose for the first time in five months, with exports to ASEAN and the EU also rising. In contrast, exports to the U.S. slipped, weighed down by fresh tariffs announced in late July. Imports were up 8.2% in year-on-year terms in September, following a 4.1% drop in the prior month.

Panelist insight: Commenting on the outlook, Nomura’s Jeong Woo Park said: “We expect rising chip prices to sustain strong chip exports, which can offset weaker demand and price cut pressures from non-chip sectors. That said, we believe auto exports will likely be under pressure, as the US government will end EV subsidiees by end-September, although a recovery in demand for EVs in the EU can partly offset the likely slowdown in the US market. However, in the US market, Korean auto exporters are paying higher tariffs (25%) than their competitors (Japan and EU), even after Korea and the US reached an agreement to lower the auto tariff to 15% from the current 25%.”

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