U.S. overtakes China as top export partner for first time in 20 years

Industry

Published: 01 Jan. 2024, 16:46 Updated: 01 Jan. 2024, 18:03

U.S. overtakes China as top export partner for first time in 20 years

Automobiles for export parked in a container yard at the Pyeongtaek-Dangjin Port [NEWS1]

Korea's exports to the United States surpassed those bound for China in December for the first time in two decades thanks to shifting geopolitics and high demand for EVs.

Korea's exports to the United States stood at an all-time high of $11.3 billion, regaining its fist No.1 position since June 2003 in terms of monthly figures, according to data released by the Ministry of Trade, Industry and Energy on Monday.

Exports to China fell 2.9 percent on year to reach $10.9 billion in December.

Through 2023, the United States climbed up to become the second largest export partner for Korean goods after China, beating Asean countries for the first time since 2005.

The United States was the destination for 18.3 percent of Korean goods last year, narrowing the country's gap with China by 1.4 percentage points. In 2020, the gap was more than 11 percentage points.

Korea logged a trade surplus of $4.5 billion with the United States in 2023, beating Asean's $3.1 billion.

Korea logged $18 billion trade deficit in trades with China for the first time in 31 years since the two countries established diplomatic ties in 1992.

Korea's total exports fell 7.4 percent on year in 2023, resulting a trade deficit for the second consecutive year, due to weak global demand coupled with the Chinese economy's delayed recovery.

Outbound shipments stood at $632.6 billion last year, and imports decreased 12.1 percent on-year to $642.7 billion in 2023, resulting in a trade deficit of $9.97 billion.

That's still big recovery since 2022, when the trade deficit stood at $47.8 billion. Exports grew for the three consecutive months beginning in October.

The slow but sure recovery of chip exports helped a lot. Such exports clocked $11 billion in December, an on-year increase of 21.8 percent, backed by rising memory chip prices and growing demand for the products.

December marked the first time that Korea's monthly chip exports have exceeded $10 billion in the 15 months since September 2022.

Automobiles also contributed. Outbound vehicle shipments gained 17.9 percent in December, having maintained growth for 18 consecutive months.

Total automobile exports rose 31.1 percent to $70.87 billion, a record high.

The United States was the biggest trader of automobiles worldwide, with around 30 percent of its exports coming from the sector. Exports of EVs and SUVs jumped 44.2 percent to $28.77 billion last year through the end of November, according to data from the Korea Trade International Trade Association.

"The fact that chip exports exceeded $10 billion in December is the barometer of export recovery, and we can see that chip exports have entered an upcycle," said Trade Minister Bang Moon-kyu. "Korea's exports gained upward momentum for 2024."

BY SARAH CHEA [chea.sarah@joongang.co.kr]