With U.S. President Donald Trump securing his re-election, significant changes are anticipated for the South Korean economy.
Exports have remained in surplus for five consecutive months, bolstered by strong performance in sectors like semiconductors. However, there are growing concerns that Trump’s victory could have a negative impact on exports.
On the 7th, the Director General of Economic Statistics at the Bank of Korea, in a briefing following the release of current account data, addressed questions regarding former President Trump’s re-election. He stated, "Given Trump’s promises on tariffs and protectionist trade policies, there is a greater likelihood of negative impacts on Korea’s trade and exports."
The director added, "Depending on the sector and product, this could present both opportunities and challenges. However, based on current analysis, negative perspectives seem to be prevailing." He also noted that "such aspects will be reflected in the revised economic outlook set to be released on the 28th of this month."
According to the Bank of Korea’s preliminary international balance of payments data, South Korea’s current account has maintained a surplus for five consecutive months. The September current account surplus stood at $11.12 billion (approximately 17 trillion KRW). After experiencing a deficit in April—the first in a year—due to increased foreign dividend payouts, the account returned to surplus in May and has remained positive since then.
Exports increased by 9.9% year-on-year. This marks twelve consecutive months of growth since last October’s turnaround, following a decline of over a year. The positive trend in exports is attributed to strong demand in semiconductors, mobile phones, and automobiles. By category, semiconductors increased by 36.7%, ICT devices by 30.4%, and passenger vehicles by 6.4%. Imports also rose by 4.9%.
Regarding the impact of Trump’s re-election on the KRW-USD exchange rate, the Director General commented, "South Korea’s export competitiveness has shifted significantly from price-based to quality-based. As a result, a higher exchange rate is unlikely to substantially boost export growth." He further explained, "While a significant rise in the exchange rate could increase the cost of imports for raw materials like crude oil—potentially reducing the current account or trade surplus—the effect on the current account balance would be limited, as it is more directly influenced by global oil prices and domestic demand for crude oil."
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