Despite China’s push and U.S. tariffs, South Korea’s non-IT exports hold up well, led by shipbuilding and defense

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[Financial News] Even amid China’s manufacturing push and the United States’ tougher tariff policies, South Korea’s non-IT exports have held up relatively well compared with major rival countries, led by high-tech items such as ships, rail cars and defense products.
According to a report released by the Bank of Korea (BOK) on the 29th, titled "Assessment of Competition Among Major Countries in Non-IT Exports," South Korea’s global market share in non-IT heavy and chemical industrial products rose slightly to 4.0% in 2024 from 3.9% in 2019.
Over the same period, China’s share expanded sharply from 11.0% to 14.6%, a gain of 3.6 percentage points. Germany’s share fell from 12.4% to 11.1%, while Japan’s dropped from 6.9% to 5.6%. Among major manufacturing powers, South Korea was the only country to defend its share.
The BOK said, "Even as China rapidly expanded its global market share by improving its technological capabilities and production capacity, South Korea performed relatively well compared with Germany and Japan."
Its competitiveness was especially strong in high-tech products. Based on an analysis using the Product Complexity Index (PCI), South Korea’s exports of high-tech items grew by an average of 6.8% annually from 2020 to 2024, outpacing the global average of 6.0%, Germany’s 5.2% and Japan’s 2.3%.
By product category, market share gains were seen in transport equipment such as cargo ships, electric rail cars and diesel-electric locomotives, as well as in defense sectors including artillery weapons and rocket launchers.
The BOK explained, "Our products are increasingly replacing some existing German and Japanese products, alongside Chinese goods."
The impact of changes in U.S. tariff policy was also partly evident. Based on the second quarter of 2025 through the first quarter of 2026, South Korea’s exports of non-IT tariffed goods to the United States fell 12.8% from a year earlier.
However, during the same period, the decline in South Korea’s share of the U.S. import market was 0.4 percentage points, smaller than China’s 1.9 percentage points, Japan’s 2.1 percentage points and Germany’s 2.2 percentage points.
The BOK analyzed that high tariffs on Chinese goods gave South Korean products some substitution gains in the U.S. market. In fact, many cases were observed in which South Korea’s share rose in product categories where China’s share fell.
Looking ahead, non-IT exports are expected to shift away from price competition in generic goods and toward technology competition centered on high value-added and high-tech products. The BOK said, "As global competition intensifies, quantitative growth in non-IT exports will be limited, and competition in technology and quality will become key."
imne@fnnews.com Hong Ye-ji Reporter