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South Korean Exporters Cite FX Volatility and U.S. Tariffs as Top 2026 Risks

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  • Containers are waiting to be shipped at a port in Pyeongtaek, about 60 kilometers south of Seoul, in this Jan. 27, 2026, file photo. (Yonhap)
    Containers are waiting to be shipped at a port in Pyeongtaek, about 60 kilometers south of Seoul, in this Jan. 27, 2026, file photo. (Yonhap)
    Image: Yonhap
    Containers are waiting to be shipped at a port in Pyeongtaek, about 60 kilometers south of Seoul, in this Jan. 27, 2026, file photo. (Yonhap) Source Full size

Survey Scope Reveals Mixed Outlook for 2026 The Korea International Trade Association surveyed 1,193 export firms, finding 28.6% expect conditions similar to 2025, 31.1% anticipate improvement, and 30.3% foresee a downturn [1]. Respondents expressed uncertainty about global demand and supply‑chain stability. The data reflects the most recent sentiment among South Korean exporters as of February 2026.

Sales Targets Rise While Investment Remains Strong Over 47% of firms have set higher sales goals for 2026 compared with the previous year [1]. More than 80% plan to maintain or expand domestic and overseas investments, signaling confidence in growth opportunities despite external headwinds. Companies aim to capture market share in high‑value sectors such as semiconductors and medical equipment.

FX Volatility and U.S. Tariffs Identified as Leading External Risks 43.5% of respondents cite foreign‑exchange market swings as a major threat, while 40.1% point to United States tariff policies as an equally serious risk [1]. Both factors are expected to increase cost pressures and erode profit margins. Exporters call for policy measures to mitigate currency instability and trade barriers.

Weak Won Increases Input Costs and Buyer Price Pressure Firms report rising import prices for raw materials as the Korean won weakens [1]. Overseas buyers are simultaneously pressuring exporters to lower prices, squeezing margins. The dual impact threatens competitiveness, especially for price‑sensitive product lines.

Chinese Rivals Viewed as More Competitive Across Key Sectors Competitiveness ratings place Chinese firms at 99.1–99.3% of Korean firms, up from 95.8–97% three years earlier [1]. Chinese strength is noted in petroleum, home appliances, and steel, while South Korea leads in semiconductors and medical equipment. Nearly half of respondents urge the government to stabilize the won, and 28% request trade‑risk mitigation through negotiations with major economies [1].

Sources

Timeline

Dec 3, 2024 – Martial law is declared, triggering a sharp sell‑off that drives the won to multiyear lows and the KOSPI toward 2,300 points, the most abrupt economic shock in recent years[30].

Q1 2025 – South Korea’s GDP contracts 0.2 % as private consumption falls 0.1 %, prompting the IMF and Bank of Korea to cut 2025 growth forecasts to about 0.8 %[30].

Oct 2025 – The United States and South Korea agree to lower tariffs to 15 % in exchange for a $350 bn U.S. investment pledge, easing trade uncertainty and supporting an export rebound[21].

Oct 2025 – South Korea records its 30th consecutive monthly current‑account surplus, $6.81 bn, despite a dip in export volumes, extending a streak that began in May 2023[24].

Nov 2025 – Consumer‑price inflation rises to 2.4 % YoY, surpassing the 2 % target for a third month, driven by agricultural and petroleum price spikes and a weak won that amplifies pressure[27].

Nov 2025 – Producer‑price index climbs 0.3 % MoM to 121.32, led by strong semiconductor and electronic‑device demand and a depreciated won, with DRAM up 15.5 % and flash memory up 23.4 %[20].

Nov 2025 – Current‑account surplus hits a record $12.24 bn, the largest ever for November, as a 5.5 % export rise and a 38.7 % jump in chip shipments expand the goods surplus[13].

Nov 2025 – Exports surge 8.4 % to $61.04 bn, propelled by a 38.6 % rise in semiconductor shipments and a 13.7 % increase in auto exports, widening the trade surplus to $9.73 bn[29].

Dec 2025 – South Korea posts a record $123.05 bn current‑account surplus for the year, the highest ever, driven by a $138.07 bn goods surplus and a 21.9 % jump in semiconductor shipments; BOK’s Kim Young‑hwan cites a semiconductor super‑cycle and falling oil prices[2].

Dec 2025 – Annual exports exceed $700 bn for the first time, making Korea the sixth country worldwide to reach the milestone, with semiconductors, automobiles, ships and bio‑goods leading the surge[15].

Dec 2025 – Leading business groups (KCCI, FKI) push for aggressive AI‑led growth in 2026, urging swift investment projects, policy predictability and AI‑based export‑support infrastructure[16].

Dec 2025 – The finance ministry announces plans to launch a sovereign‑wealth fund in the first half of 2026, modeled on Singapore and Australia, and a special export‑support fund to back overseas deals, alongside a $200 bn strategic investment corporation under the U.S. tariff deal[22].

Dec 2025 – K‑pop album exports reach a record $301.7 mn in 2025, with Japan remaining the top market and China overtaking the U.S. for second place, even as domestic album sales fall for a second year[11].

Dec 2025 – Electric‑equipment exports climb 11.3 % YoY to $7.13 bn (Jan–Nov), led by the United States (37 % share), as AI‑driven data‑center demand fuels growth[26].

Dec 2025 – Food exports total $10.4 bn through November, up 7 % YoY, with processed foods (60.8 %) and fisheries (27.5 %) driving the record; officials expect the full‑year total to surpass the 2024 high of $10.7 bn[23].

Jan 7, 2026 – The Bank of Korea projects total employment to rise by 150,000 in 2026, with private‑sector jobs contributing 60,000, reflecting a modest recovery after weak 2024 hiring[14].

Jan 12, 2026 – Exports dip 2.3 % in the Jan 1‑10 period to $15.55 bn, while chip shipments jump 45.6 % to $4.64 bn; declines in autos, vessels and steel offset semiconductor strength[12].

Jan 21, 2026 – Outbound shipments for Jan 1‑20 reach $36.36 bn, up 14.9 % YoY, driven by a 70.2 % surge in semiconductor exports to $10.73 bn, even as auto and vessel shipments fall[9].

Jan 25, 2026 – A survey of economists finds 54 % expect 2026 growth around 1 %, 36 % anticipate 2 % from 2027 onward, and warns that U.S.‑Korea tariff talks could hurt exports; the won is forecast at 1,403‑1,516 per dollar[8].

Jan 29, 2026 – The U.S. Treasury keeps South Korea on its FX‑monitoring list, citing a $52 bn U.S. trade surplus and a current‑account surplus equal to 5.9 % of GDP, and notes won depreciation in late 2025[7].

Jan 30, 2026 – Korea International Trade Association releases 2025 industrial‑output data showing overall growth of just 0.5 % YoY—the weakest expansion since 2020—while semiconductor output surges 13.2 % YoY, highlighting sectoral divergence[6].

Feb 1, 2026 – January exports hit a record $65.85 bn, up 33.9 % YoY, with semiconductor shipments soaring 102.7 % to $20.54 bn on AI‑server demand, and the trade surplus widening to $8.74 bn for the 12th straight month[5].

Feb 3, 2026 – Consumer‑price index rises 2 % YoY in January, the slowest increase in five months, as petroleum prices stabilize and food items such as eggs climb 6.8 % amid avian‑flu concerns[4].

Feb 6, 2026 – A senior Seoul official in Washington signals “some new progress in a few days” on North‑Korea‑related issues, while the U.S. State Department reaffirms its nuclear umbrella for South Korea and urges next steps under a bilateral trade deal[3].

Feb 6, 2026 – The KOSPI falls 4.77 % to 4,917, slipping below 5,000 after Wall Street AI‑sector losses raise worries that AI investments could become financial burdens for Korean firms[3].

Feb 6, 2026 – The Korea Meteorological Administration expands a cold‑wave alert across central and southern regions, forecasting –15 °C to –5 °C temperatures over the weekend, raising energy‑demand concerns[3].

Feb 17, 2026 – A KITA survey of 1,193 exporters finds foreign‑exchange volatility and U.S. tariff policies as the top external risks, with 43.5 % citing FX swings and 40.1 % pointing to U.S. tariffs; firms also view Chinese rivals as increasingly competitive, rating them at 99‑100 % of Korean competitiveness[1].

Future 2026 – The sovereign‑wealth fund and export‑support fund are slated for launch in the first half of 2026, while the AI transition plan aims to position Korea as a global leader in physical AI such as AI‑powered robots, automobiles and ships[22].

Future 2027 – Economists surveyed in January 2026 expect South Korea’s growth to reach 2 % from 2027 onward, driven by a gradual recovery in consumption and demand, despite near‑term challenges from tariff negotiations and won volatility[8].

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