South Korea Imports Fall More than Expected

South Korea’s imports dropped 4.0% yoy in August 2025, reversing a 0.7% gain in the prior month and marking the first contraction since May, flash data showed.

The decline was steeper than market estimates of a 0.1% drop, pressured by U.S.

tariffs despite Seoul’s KRW 30.5 trillion supplementary budget.

Beyond tariff effects, imports were weighed by subdued domestic demand amid high debt, weaker industrial activity tied to sluggish global electronics demand, and stable energy prices that lowered the import bill.

Firms also appeared to scale back buying after front-loading shipments earlier in anticipation of trade frictions.

Meanwhile, structural shifts in the petrochemicals sector, including plans to cut naphtha-cracking capacity, dampened feedstock demand.

Still, Seoul’s late-July trade deal with Washington, committing USD 350 billion in U.S.

investments and USD 100 billion in energy purchases, highlights the ongoing tension between cushioning tariff shocks and reshaping trade flows.