South Korea’s imports fell 4.0% yoy in August 2025, reversing a 0.7% gain in July and marking the first decline since May, flash data showed. The drop was steeper than market estimates of a 0.1% drop, pressured by U.S. tariffs despite Seoul’s KRW 30.5 trillion supplementary budget to support growth. Beyond tariff effects, imports were weighed by subdued domestic demand amid high debt, weaker industrial activity tied to sluggish global electronics demand, and stable energy prices that lowered the import bill. Firms also appeared to scale back purchases after front-loading shipments earlier in anticipation of trade frictions. Meanwhile, structural shifts in the petrochemicals sector, including plans to cut naphtha-cracking capacity, dampened feedstock demand. Still, Seoul’s late-July deal with Washington - committing USD 350 billion in U.S. investments and USD 100 billion in energy purchases - highlights the ongoing tension between cushioning tariff shocks and reshaping trade flows.