Korea's trade surplus with U.S. halves in April as those of Japan, Taiwan widen

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Korea's trade surplus with U.S. halves in April as those of Japan, Taiwan widen

Published: 09 Jun. 2025, 07:00 Updated: 09 Jun. 2025, 18:24

Audio report: written by reporters, read by AI

Export-bound vehicles are parked at Pyeongtaek Port in Pyeongtaek, Gyeonggi on June 1. [YONHAP]

Korea took a bigger blow than Japan and Taiwan from the United States’ “tariff bomb” under President Donald Trump, recent trade data showed, with Seoul’s trade surplus with Washington halving in April while Tokyo and Taipei saw theirs widen.

The United States recorded a $61.6 billion trade deficit in April, down $75.7 billion from March’s $138.3 billion, according to the "U.S. International Trade in Goods and Services, April 2025" report released by the United States Department of Commerce on Thursday.

This marked the smallest deficit in 19 months since September 2023. The goods deficit alone fell from $151.3 billion to $87.5 billion, a drop of $63.8 billion.

Trade balance refers to the difference between a country's exports and imports of goods and services, reflecting the net earnings from trade. The data showed that Trump’s tariff policies impacted trade significantly in April.

The United States imposed a 25 percent tariff on March 12 on steel and aluminum, before slapping a 25 percent tariff on automobiles and parts on April 3 and 5 and following up with a 10 percent base tariff on other goods.

Steel products stacked at the export yard of Pyeongtaek Port in Pyeongtaek, Gyeonggi on June 4. [NEWS1]

The United States imported $9.8 billion worth of Korean products and exported $6 billion to Korea in April, resulting in a $3.8 billion trade deficit, according to the report.

That was down from a $6.3 billion deficit in March, a $2.5 billion drop.

U.S. imports of Korean goods fell by $2.3 billion, or 19 percent, from $12.1 billion in March to $9.8 billion in April following the tariff measures.

In contrast, Japan, whose trade volume with the United States is comparable to Korea’s, saw its trade surplus increase from $6.2 billion in March to $6.7 billion in April.

Korean firms proved more vulnerable to auto-related tariffs than Japanese companies.

U.S. imports of Japanese automobiles and parts dropped by only $300 million from $5.2 billion in March to $4.9 billion in April, while imports of Korean autos and parts fell 41.7 percent, from $4.8 billion in March to $2.8 billion in April.

Vehicles sit lined up on a lot near the docks at the Port of Nagoya, Aichi prefecture in Japan on June 2. [AFP/YONHAP]

“While Korea’s electric vehicle exports to the U.S. have sharply declined this year, Japan’s figures remained steady as EVs make up a smaller portion of its exports,” said Jang Sang-sik, head of the Korea International Trade Association’s International Trade and Commerce Research Center. “Korea took a double hit from both tariffs and the EV demand ‘chasm.’

“Since March, Hyundai has begun full-scale EV production at its Georgia plant, which also affected the numbers.”

Taiwan, which primarily exports semiconductors to the United States, showed a similar trend to Japan.

Washington’s trade deficit with Taipei expanded from $7.8 billion in March to $9.6 billion in April, driven by increased imports from Taiwan, which rose from $12.4 billion to $14.6 billion.

“Taiwan’s exports are mainly IT and semiconductors,” said Jang. “Because tariffs have yet to be imposed on semiconductors and demand remains strong due to AI growth, Taiwan maintained its export strength.”

Even China fared better than Korea. Despite being hit with retaliatory tariffs as high as 145 percent, the United States’ trade deficit with China shrank by only $700 million, from $17.9 billion in March to $17.2 billion in April.

Vietnam’s figures remained stable at $13.5 billion in March and $13.6 billion in April.

By contrast, the United States significantly reduced its trade deficit with the European Union — from $47.6 billion in March to $19.2 billion in April — and with Canada and Mexico, from $22.1 billion to $16.3 billion.

Analysts attributed this to American importers rushing to secure inventories in March ahead of tariff implementation, leading to lower imports in April.

Reuters noted that U.S. trade deficits could vary significantly depending on inventory conditions.

These trends are expected to influence Korea’s ongoing tariff negotiations with the United States.

President Lee Jae-myung, left, and U.S. President Donald Trump [EPA/YONHAP]

While the Korean government hopes to extend a mutual tariff suspension agreement set to expire on July 8, the U.S. has maintained that “there will be no extension,” adding pressure to reach a deal quickly.

President Lee Jae-myung spoke with President Trump by phone on Friday and agreed to pursue an agreement “as soon as possible.”

“The new administration needs to first verify the possibility of extending the tariff suspension and then accelerate top-down negotiations through a summit,” one trade expert said.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM WON [[email protected]]