Korea’s trade surplus with the U.S. decreases continuously for four years
Korea’s trade surplus with the U.S. decreases continuously for four years
  • Jung Jun-ho
  • 승인 2020.03.16 10:40
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Korea’s trade with the United States rose 2.7 percent on-year last year, hitting an all-time high. However, its trade surplus with the U.S. has been on the decline for four years in a row due to a large increase in energy imports such as crude oil and LPG.

According to an analysis of the trends of the Korea-U.S. trade announced by the Korea Customs Service on the occasion of the eighth anniversary of the effectivation of Free Trade Agreement (FTA) on May 15, trade between the two countries rose 2.7 percent year-on-year to $135.2 billion last year in 2019.

The increase, however, is down from a 10.3 percent on-year increase in trade volume in 2018 and 8.8 percent on-year in 2017, according to the report. The fallout from the U.S.-China trade conflict seems to have played a role.

Korea’s exports to the U.S. stood at $73.3 billion in 2019, up only 0.9 percent from the previous year's $72.7 billion. However, compared with the 10.4 percent drop in total export volume, it is interpreted as a good thing. Imports from the United States rose 5.1 percent on-year to $61.9 billion.

The trade balance with the U.S. remained in the black at $11.4 billion. The surplus, however, has been on a steady decline since posting a surplus of $25.8 billion in 2015, with $23.3 billion in 2016, $17.9 billion in 2017 and $13.8 billion in 2018.

Major exports were found to be automobiles, semiconductors and petroleum products, with petroleum products (20.7 percent) and plastic products (15 percent) leading the export increase. This is because demand for petroleum products and plastic products has increased due to the strong U.S. economy.

Major imports were crude oil, semiconductors, aircraft and part, while energy imports such as crude oil (99.7 percent) and liquefied petroleum gas (10.6 percent) increased significantly due to the diversification of energy import lines. The increase is attributed to measures to expand imports of U.S. raw materials, including gas, that began in 2017.

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