South Korean exports rose at a much faster-than-expected pace in April, surging for a sixth straight month helped by robust demand for high-tech memory chips and adding confirmation to perceptions of broad recovery in the global economy.
Exports to the United States rose in April, but South Korea’s trade surplus with that country declined on an annual basis over the same period, Monday’s data showed, potentially easing concerns Washington may impose protectionist measures that could hurt South Korea’s economy—Asia’s fourth-largest, Reuters reported.
US President Donald Trump said last week in an interview with Reuters that he was seeking to change a free trade deal with South Korea or scrap it entirely.
Preliminary data showed April’s exports soared 24.2% from a year earlier to $51.01 billion, while imports surged 16.6% to $37.75 billion to create a $13.25 billion trade surplus, the ministry of trade, industry and energy said. Exports rose at the fastest pace since August 2011, when they gained 25.5%.
Shipments to the United States rose 3.9% on-year in April, rebounding from a 5% fall in March, the official breakdown showed. South Korea’s trade surplus with the United States was $1.68 billion in April, down from $2.52 billion a year before.
Machinery, oil products and household electronics were the main drivers of exports to the United States last month.
“If this trend continues, South Korea will have likely escaped one of the criteria for currency manipulator designation,” said An Ki-tae, an economist at NH Investment & Securities, adding the trade surplus with the United States was likely to fall below $20 billion this year if it kept declining at the current tempo.
“The controversy over trade with the United States will probably fade at this rate,” he said.
A US trade and customs enforcement law enacted last year set out three criteria for identifying manipulation among major trading partners: a “material” global current account surplus, a “significant” bilateral trade surplus with the United States, and persistent one-way intervention in foreign exchange markets.
Meanwhile, exports to China rose 10.2% on-year in April versus a 12.1% gain in March. Last month’s gain was thanks to the booming construction sector and capital expenditure in China, the data showed.
Overall, semiconductor chip and flat display panel exports boosted headline export performance in April, jumping 56.9% and 10.2% on-year respectively. Ship exports also lent a hand, soaring 102.9%.
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