U.S. tops export market in early April, first time in 20 years

Containers are stacked at a port in Incheon on April 2. [NEWS1]

The United States was Korea's largest export partner in early April, the first time in two decades.

China fell to second place as its recovery takes longer than expected.

Monthly exports to China plunged 31.9 percent this month through April 10 from a year earlier, while exports to the United States jumped 32.1 percent, according to the Korea Customs Service on Tuesday.

It was the first time in 20 years that exports to the United States outweighed those to China.

Exports to China have been shrinking for 10 straight months and are on the road to record an 11th.

Korea reported a monthly trade deficit for the sixth straight month due to weak exports to China and the sluggish chip market.

Exports dropped 8.6 percent on year to stand at $14 billion while imports fell 7.3 percent on year over the same period to log $17.4 billion.

The trade deficit amounted to $3.42 billion over 10 days as exports plunged further than imports. The cumulative deficit for this year going into April totaled $25.9 billion, more than half of the yearly deficit of $47.8 billion last year.

Semiconductor exports, Korea’s No. 1 export item, plummeted 39.8 percent on year to $1.77 billion as memory chip prices and global demand remain dull. Seven of the top 10 export items sold less, but the other three items climbed — ships by 142.1 percent, automobiles by 64.2 percent and car parts by 6.7 percent.

Exports to the United States surged 32.1 percent to $3.05 billion, putting the United States on top over China as Korea’s largest export market.

If the standings continue through the rest of April, total monthly exports to the United States will surpass those to China for the first time since June 2003.

Taiwan bought 32.8 percent less Korean exports and Vietnam bought 32.6 percent less.

Imports from China increased to run a $1.13 billion trade deficit over 10 days. Finance Minister Choo Kyung-ho said the surplus earned from trading with China is no longer a given.

“Korea’s export strategy needs to change in line with the shift in China’s trade structure with Beijing seeking to become self-reliant and domestic-centered,” said Chang Sang-sik, head of the Korea International Trade Association’s analysis and forecasting department.

Declining energy imports prevented the trade deficit from rising higher.

Imports of the three major energy sources decreased on year. Crude oil imports fell by 34 percent, gas by 3.1 percent and coal by 9.5 percent.

However, energy imports may become a negative factor if oil prices rise following the OPEC+ producers’ recent decision to cut oil output.

The government anticipates better export performance in the back half of this year.

“We will do the legwork to export another dollar,” said Korea Trade-Investment Promotion Agency (Kotra) President Yu Jeoung-yeol in a press briefing Tuesday, adding that the state-run trade agency is exerting all efforts to respond to sluggish exports.

Kotra will restore export figures by executing 70 percent of the annual overseas marketing budget before July, Yu said. The Yoon administration aims to log $685 billion in exports this year and created an interagency export strategy meeting.

“A complacent approach to exports going into the second half of the year can lead to failures in both halves triggered by uncertainties such as oil prices,” said Kim Jung-sik, an economics professor at Yonsei University.

The government needs to actively support businesses with tax cuts and eased regulations and have them withstand the current crisis, Kim added.

BY JEONG JONG-HOON, KO SUK-HYUN [sohn.dongjoo@joongang.co.kr]