South Korea’s exporters are bracing for a pivotal final quarter in 2025, as optimism in key industries like semiconductors and shipbuilding is tempered by mounting global trade headwinds and significant policy shifts in the United States. According to a report released September 25 by the Korea International Trade Association (KITA), the Export Businesses Survey Index (EBSI) for the fourth quarter climbed to 101.4, nudging past the 100-point threshold for the first time in a year—a signal that many companies expect export conditions to improve, if only slightly, in the months ahead.
At the heart of this cautious optimism lies a surge in confidence among South Korean semiconductor manufacturers. The EBSI for semiconductors hit a robust 145.8, the highest among all sectors surveyed, buoyed by hopes that memory chip prices will rebound and that demand for chips powering artificial intelligence (AI) systems will accelerate through December. KITA’s Institute for International Trade confirmed that this marks the second consecutive quarter semiconductors have led the export outlook, reflecting their centrality to Korea’s economic engine.
Shipbuilding, another of Korea’s traditional export mainstays, is also riding a wave of anticipation. The sector’s EBSI stands at 110.3, with the report citing the Make American Shipbuilding Great Again (MASGA) initiative—a shipbuilding partnership inked with the United States in late July—as a key driver. This agreement opens the door for Korean shipbuilders to expand their presence in the U.S. market, even as the industry faces a global slowdown in new orders and project delays, particularly in the liquefied natural gas (LNG) segment.
Telecommunication devices, too, are expected to see improved export prospects, with an EBSI value of 119.2. These gains, however, are offset by persistent struggles in other sectors. Plastics, rubber, and leather goods posted a gloomy EBSI of 62.4, while automobiles and auto parts fared little better at 69.3. The automotive sector, in particular, is caught in the crosshairs of U.S. trade policy uncertainty. Although President Donald Trump announced on July 30 that tariffs on South Korean cars and parts would be slashed from 25 percent to 15 percent in exchange for a $350 billion Korean investment in the U.S., the deal remains stalled as both sides haggle over the terms. Until implementation is finalized, Korean car exporters face an uneasy road ahead.
"Expectations for a recovery in exports are growing, particularly for the country's major export items, such as ships and semiconductors. But uncertainties regarding global trade and cost increases are still looming," the KITA report noted, capturing the prevailing mood among Korean exporters.
Those uncertainties have only deepened for small and medium-sized enterprises (SMEs) operating in the dynamic world of online exports. On August 29, the Trump administration abolished the U.S. de minimis tariff exemption, which had previously allowed small parcels valued under $800 to enter the country duty-free. This change, enacted by executive order and justified as a move against tariff circumvention, has sent ripples through Korea’s SME community—especially in sectors like K-Beauty, K-Food, fashion, and lifestyle, which have thrived on direct-to-consumer e-commerce sales to American buyers.
Recognizing the gravity of the challenge, South Korea’s Ministry of SMEs and Startups (MSS) convened a roundtable on September 24, bringing together exporters, platform operators, and logistics companies in Seoul. Minister Han Seong-sook acknowledged the new reality: "With the recent elimination of the U.S. de minimis exemption, online exporters are operating in an increasingly unfavorable environment. We are exploring ways to ease the logistics burden, which exporters cite as their biggest obstacle."
Exporters at the meeting voiced urgent concerns about rising costs, with logistics standing out as a critical pain point. In response, MSS announced plans for an SME Online Export Promotion Plan, expected to be unveiled in the coming weeks. The ministry’s strategy goes beyond short-term subsidies, aiming to consolidate shipments from multiple SMEs into bulk deliveries—a move designed to lower per-unit shipping costs. Lim Dong-woo, Director of Global Growth Policy at MSS, explained, "Since the abolition of the de minimis rule will increase export costs, we will help offset those costs through logistics support. By pooling shipments from multiple small businesses, we can reduce the unit cost of freight."
Minister Han also emphasized the importance of strengthening Korea’s digital export infrastructure. The government intends to nurture new domestic e-commerce platforms, deepen cooperation with global giants like Amazon and Shopee Korea, and identify promising export items for targeted support. "The online market has low entry barriers and relatively small risks, making it a valuable channel for SMEs seeking new markets and customers. We will focus our support on developing diverse platforms and discovering export items with strong global potential," she said.
The abolition of the de minimis exemption has forced a reckoning for Korean SMEs, but officials are determined to turn adversity into opportunity. By focusing on logistics innovation and digital platform expansion, Korea aims to maintain its competitive edge in a rapidly evolving global marketplace—one where regulatory agility and operational efficiency are as vital as product quality.
Still, the macroeconomic landscape remains fraught with hazards. The KITA report highlighted several persistent challenges for exporters in the fourth quarter: rising raw material prices (cited by 15.7% of respondents), economic recession in key destination countries (14.2%), buyer demands for price reductions (12.8%), and ever-tighter import regulations (12.5%). Import regulations and trade friction, while slightly improved from the previous quarter, remain the most negative categories in the survey, with a score of 83.7. Manufacturing costs, too, are a growing worry, dropping from 95.8 in the third quarter to 86.8 in the latest report.
Ok Woong-ki, a senior researcher at KITA, summed up the situation: "While expectations for export economic improvement are reviving, centered on key items such as semiconductors and ships, uncertainties such as cost increases and trade friction remain significant. Companies should focus on cost reduction efforts along with market diversification and strengthening high-value-added products, while the government should provide tailored, field-oriented support in parallel."
For now, the path forward for Korean exporters is a delicate balancing act—capitalizing on surging demand for high-tech goods and new shipbuilding partnerships, while navigating the treacherous currents of trade policy shifts and rising global costs. Whether these efforts will be enough to sustain Korea’s export momentum as the world economy teeters on the edge remains to be seen. But if there’s one thing the country’s export sector has shown, it’s a knack for adaptation and resilience, even when the odds seem stacked against it.
