South Korea's trade surplus with US will shrink, exporters say
SEOUL: South Korea's record-high trade surpluses with the United States will gradually narrow as companies continue to invest in the US market, the country's biggest exporter group said on Thursday.
"There is a high possibility of trade imbalances between South Korea and the United States gradually easing on continued and prolonged investments in the country," Korea International Trade Association (KITA) said in a report.
In 2024, 46.8 per cent of US imports from South Korea were intermediate goods shipped to the country for direct investments, according to KITA.
South Korea earned a surplus of US$55.6 billion from trade with the US in 2024, up 25 per cent from 2023 and a record high, led by rising car exports, according to Korea Customs Service data.
Seoul has been engaging with Washington since they agreed in mid-April to craft a trade package lowering tariffs by July 8. In the latest working-level discussion last week, Washington demanded that Seoul resolve the large trade imbalance between the two countries, according to local media reports.
KITA said South Korea's rising trade surpluses did not result from unfair trade practices. Of the increase of US$36.9 billion in the last three years, US$27.7 billion was related to substitutions of Chinese products within US supply chains, increases in US demand and structural changes in US imports, the business group said.
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