South Korea’s Exports Rebound in February but Trade Momentum Weakens

South Korea's exports are expected to rise 3.8% in February from a year earlier, driven mainly by more working days, according to a Reuters poll of 18 economists. However, trade momentum is weakening amid escalating global tariffs.

Exports fell 10.2% in January, ending a 15-month growth streak, partly due to the Lunar New Year holiday reducing working days. February had 22 working days, up from 20.5 in 2024, contributing to the rebound. In the first 20 days of the month, exports surged 16%, with shipments to China and the U.S. up 13.6% and 16%, respectively. However, when adjusted for working days, exports declined 2.7%.

South Korea, a key global trade indicator, faces mounting pressure from U.S. tariffs under President Donald Trump’s second term. Additional duties on Chinese imports, including semiconductors and automobiles, are expected to impact the economy.

The Bank of Korea has already cut interest rates and revised its 2025 GDP growth forecast down to 1.5% from 1.6%-1.7% due to slowing exports. Analysts predict that while February’s exports will show growth, underlying momentum remains weaker than expected.

Imports are estimated to have risen 1.7% after a sharp 6.4% drop in January, the largest since June 2024. South Korea’s trade balance is forecast to post a $4.59 billion surplus, recovering from a $1.86 billion deficit the previous month.

The official trade report, offering an early insight into global trade health, will be released on March 1 at 9 a.m. local time (0000 GMT).