Trade war, tech confrontation and a cyclical bottom in the semiconductor cycle will combine to ensure an actual fall in Korean exports through 2019. Last year, semiconductor sales accounted for a staggering 92% of Korean export growth, a single product dependence more akin to an oil exporter than a tech hub. The payback is now coming as trade friction exacerbates a chip price collapse. Export growth ex semiconductors is far from benign, either. A rate cut and fiscal stimulus are coming in Q3, but this will be insufficient to offset the trade decline.
The Bank of Korea cut interest rates on 18th July, for the first time since 2016, surprising market expectations.