S. Korea's U.S. Trade Surplus Nears $100 Billion Milestone

Vehicles await shipment at Pyeongtaek Port in South Korea. The country's growing trade surplus with the United States is drawing attention to ongoing bilateral trade and investment negotiations. South Korea's trade surplus with the United States reached $84.7 billion from January through September of this year, placing the country on the verge of surpassing the $100 billion mark on an annual basis for the first time. The figure has already exceeded the previous annual record of $55.6 billion set in 2024 by $29.1 billion in just the first three quarters. If the monthly average surplus holds at $5.1 billion over the remaining months of the year, the country would cross the $100 billion threshold for the first time — a target that appears well within reach given that the monthly average surplus this year has been approximately $9.4 billion. The surplus with the United States rose sharply during the Biden administration. After increasing from $22.7 billion in 2021 to $44.4 billion in 2023, the pace of growth has accelerated further this year, driven by surging U.S. demand for South Korean semiconductors and construction equipment tied to expanding infrastructure investment, including the buildout of artificial intelligence (AI) data centers. In September alone, the monthly surplus with the United States surged to $17.3 billion, setting another record. However, this widening trade imbalance is expected to emerge as a key factor in future trade negotiations with the Trump administration. President Trump has made reducing America's chronic trade deficit and strengthening the competitiveness of domestic industries central policy priorities, and has continued negotiations with trading partners over tariffs and increased investment. In April of last year, his administration announced 25% reciprocal tariffs on South Korean goods, but the rate was subsequently adjusted to 15% after South Korea pledged $350 billion in investment in the United States. One of the major issues currently under negotiation is whether South Korea will participate in the Alaska liquefied natural gas (LNG) development project. The two countries announced a set of strategic investment projects on Oct. 1, including a combined-cycle gas power plant in Texas and the construction of eight large-scale nuclear reactors, but the Alaska LNG project remains under review. President Trump has repeatedly expressed his expectation of South Korean participation ahead of the midterm elections, with attention focused on the specific terms of involvement and investment arrangements to be worked out between the two sides. The South Korean government has maintained a cautious stance, citing the need for commercial viability. However, depending on the outcome of future negotiations, there is a possibility that the tariff rate on automobiles — one of the country's leading export products — could return to 25%, making it necessary to weigh investment feasibility alongside overall trade conditions. In particular, while Japan's trade surplus with the United States in the first half of this year declined by 23.4% compared with the previous year, South Korea's surplus has continued to expand, underscoring the growing importance of a well-calibrated negotiation strategy in light of U.S. efforts to improve its trade balance. South Korea's trade balance with China also appears likely to swing back into surplus for the first time in four years, driven by strong exports of semiconductors, IT products and consumer goods. The surplus with China through September of this year stood at $34.4 billion. South Korea recorded an $18 billion deficit with China in 2023 — its first such deficit in 31 years since the two countries established diplomatic ties — and continued to post deficits in both 2024 and 2025 before this year's turnaround. Closer attention to the shifting trade environment will also be required in dealings with China. With Samsung Electronics' and SK Hynix's production facilities in China and supply chains for critical minerals such as rare earths cited as key factors, analysts have emphasized the need to carefully monitor the potential impact of changes in industrial and trade policies on South Korean companies. A government official conveyed the complexity of the situation, noting that "there are even those who sigh over how much South Korea is exporting to the United States" — a reflection of how strong export performance is itself generating new challenges in trade relations with major partners. Ultimately, the sharply widened trade surplus with the United States serves both as a testament to South Korea's export competitiveness and as a significant factor to consider in upcoming trade negotiations. Trade authorities now face the dual task of adequately explaining the drivers behind the expanding surplus while finding a careful balance between addressing U.S. expectations for increased investment and safeguarding the economic interests of South Korea's domestic industries.