SEOUL (Reuters) -South Korea’s record-high trade surpluses with the United States will gradually narrow as companies continue to invest in the U.S. 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% of U.S. imports from South Korea were intermediate goods shipped to the country for direct investments, according to KITA.
South Korea earned a surplus of $55.6 billion from trade with the U.S. in 2024, up 25% 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 $36.9 billion in the last three years, $27.7 billion was related to substitutions of Chinese products within U.S. supply chains, increases in U.S. demand and structural changes in U.S. imports, the business group said.
(Reporting by Jihoon Lee; Editing by Sonali Paul)
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