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Tumbling Korea Exports Signal Another Bad Month for Global Trade

Sam Kim
Tumbling Korea Exports Signal Another Bad Month for Global Trade

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South Korea’s exports, a bellwether for global trade, appear set for an eighth straight monthly decline as trade disputes take a toll on global demand.

Exports during the first 20 days of July fell 14% from a year earlier, data from the Korea Customs Service showed Monday. Semiconductor sales plunged 30%, while shipments to China, the biggest buyer of South Korean goods, fell 19%.

The early July data come after Asia’s fourth-largest economy, which relies on exports to generate growth, saw overseas shipments fall in June by the most in three and a half years.

From the same period in June, exports rose 4.2% and imports were up 2.8%.

The Bank of Korea last week lowered its key interest rate and slashed its 2019 economic growth forecast to 2.2%, citing the U.S.-China trade war and Japan’s export curbs on materials vital to Korea’s role in the technology supply chain. A downturn in the semiconductor industry has also hammered Korean exports.

South Korea’s 20-day trade data work as an indicator for global demand, due to their early release and Korean companies’ deep integration into the global supply chain. The nation’s second-quarter gross domestic product data, due later this week, will also help gauge the health of global demand after China and Singapore reported slumping economic growth.

Korean imports fell 10% during the first 20 days of July from a year earlier. Exports to the U.S. edged down 5.1% while those to Japan fell 6.6%. Imports from the U.S. rose 3.7%, while those from Japan dropped 15%.

(Updates with details.)

To contact the reporter on this story: Sam Kim in Seoul at skim609@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jiyeun Lee, Henry Hoenig

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