U.S. pips China to become top importer from Korea in first 5 months of 2024

Containers for export are stacked in a container yard at a port in Pyeongtaek, Gyeonggi, on May 9. [NEWS1]

The United States became Korea’s largest importer from January to May this year, overtaking China thanks to robust auto exports and chip demand.

If the current trend continues the rest of the year, the United States will become Korea's largest trading partner for the first time in 22 years.

Korea’s outbound shipments to the United States totaled $53.3 billion through the first five months of this year, outpacing the cumulative amount of $52.7 billion to China during the cited period, according to data compiled by the Ministry of Trade, Industry and Energy and Statistics Korea on Monday.

On a monthly basis, exports to the United States outpaced those to China in February, March and April.

In April in particular, exports to the United States reached a fresh monthly high of $11.4 billion, driven by the automotive sector as well as soaring semiconductor demand. China reclaimed the top spot once again in May with $11.4 billion, the highest in 19 months, mainly due to electronics and chip exports. U.S.-bound exports came in at $10.9 billion, up 15.6 percent from a year earlier and a record for May.

China has been Korea’s largest importer since 2002, with the value of shipments peaking at $162.9 billion in 2021 but since declining to $124.8 billion last year due mainly to the slow recovery of the Chinese economy and the country’s enhanced self-sufficiency in supply chains. As a result, exports to China accounted for 19.7 percent of Korea's total last year, down from the previous year’s 22.8 percent.

Meanwhile, Korea’s annual outbound shipments to the United States have been constantly growing since 2017, reaching an all-time record of $115.7 billion last year. Exports to the United States represented 18.3 percent of Korea’s total, outrunning the combined 17.3 percent of the Asean nations and reclaiming the second spot for the first time in 18 years.

By exporters, large companies’ outbound shipments to the United States already outpaced those to China last year for the first time since 2003 at $79.5 billion against $76.3 billion, while China remained the largest importer for small- and medium-sized enterprises (SMEs). That trend may break this year, however, as the cumulative export figure for SMEs came in at $4.7 billion for the United States and $4.3 billion for China in the first quarter.

“Such strong exports to the United States can be interpreted as a result of the Korean companies’ prompt response to expanded investment in the country driven by robust consumption and industrial policies such as the Inflation Reduction Act,” read a report by the Bank of Korea published in April.

“However, concerns have arisen that the growing amount of the trade surplus from the United States may lead to potential sanctions against Korea,” the central bank's report pointed out, suggesting that the government should “consider diversifying the import channel in energy and agricultural products to the United States” to mitigate pressures.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]