South Korea posts record exports amid challenges

South Korea ranked sixth in global exports in 2025, surpassing the $700 billion mark. The benchmark KOSPI index also posted a 75.6 percent gain for the year, the strongest performance among major global stock markets. These results were achieved despite a series of domestic and external challenges, including prolonged political and social instability following the Dec. 3, 2024, emergency martial law crisis, the inauguration of a new administration, tariff negotiations with the United States and rapid shifts in global supply chains. Analysts say the performance underscores the growth potential and resilience that the South Korean economy has built over time.

Exports totaling $700 billion, or roughly 1,013 trillion won, place South Korea in a small group of global export powerhouses alongside the United States, Germany, China, Japan and the Netherlands. At a time when claims that the era of free trade is ending are gaining traction, fueled by U.S. trade policies that have shifted toward protectionism and imposed high tariffs on both allies and rivals, export-driven South Korea has once again demonstrated an ability to turn crisis into opportunity.

Signs of change have also emerged in the long-criticized concentration of South Korea’s exports on the world’s two largest economies. Last year, the combined share of exports to China and the United States fell to 36 percent, down from the previous year. Even so, overall export growth was driven by sharp increases in shipments to Southeast Asia and Latin America, along with rising electric vehicle exports by Hyundai Motor and Kia to the European Union. South Korea also succeeded in adding new growth engines, including shipbuilding, defense industries, K-beauty and K-food, alongside traditional export pillars such as semiconductors and automobiles.

The benchmark KOSPI index, which had fallen to as low as 2,284 in early April last year amid the impeachment of former President Yoon Suk Yeol and the onset of a tariff war, climbed past the 3,000 mark shortly after the launch of the Lee Jae-myung administration and continued its rally beyond 4,000. The surge was fueled largely by the new government’s shareholder-friendly policies, as well as sharp gains in market heavyweights Samsung Electronics and SK hynix, whose shares rose 125 percent and 280 percent, respectively, from a year earlier. While the so-called semiconductor supercycle driven by the artificial intelligence boom played a role, such valuations would not have been possible without South Korean companies producing AI-era essentials such as high bandwidth memory.

For South Korea’s exports to take another step forward this year, fresh sources of momentum will be needed. Possible catalysts include discussions on the second phase of the South Korea-China free trade agreement, expected to take place at a bilateral summit in early January, as well as potential accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an initiative President Lee has recently shown interest in pursuing. A revised South Korea-China FTA could help ease the country’s long-standing trade deficit with China, while CPTPP membership would expand access to key markets such as Japan and Mexico.

Last year, the gap between South Korea’s and Japan’s export volumes narrowed to less than $30 billion. With economic growth projected to recover to above the 2 percent range this year and the KOSPI’s climb toward the government’s stated 5,000 target increasingly within sight, additional progress is no longer an unrealistic prospect. If policy support for exporters is sustained and entrepreneurial dynamism is revived, the Year of the Horse could be remembered as the moment South Korea finally enters the ranks of the world’s top five exporting nations.