New figures show South Korea’s exports have fallen by more than 20 percent so far in August and the sudden drop-off is being blamed on trade friction between the U.S. and China.
South Korea is the world’s largest manufacturer and exporter of semiconductors, while fresh customs data show a drop of more than 34 percent in shipments of memory chips for the first 10 days of August.
Overall exports were down 22.1 percent. Though exports to China and the U.S. fell more than 28 and 19.5 percent respectively. South Korea ships a lot of intermediate goods like memory chips to China where they are used as intermediate parts in products, which are then often shipped to the U.S., so the fall is being widely attributed to the China-U.S. trade tension.
There was also big drop in the export of petroleum products, all of which followed a year-on-year export decrease of 11 percent in July extending on-year decreases for the eighth consecutive month.
To complicate matters further, a trade dispute between South Korea and Japan, that has seen Japan slap restrictions on products essential for making memory chips and screens is expected to push up prices leading to a potential further dip in exports.
On Monday, South Korea announced it would retaliate against Japan’s restrictions by removing Japan from its list of trusted trading partners, further intensifying yet another trade dispute with global economic implications.—CCTV-PLUS