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South Korean exports rose last month as the US overtook China as the top market for the first time in 20 years. The trade ministry reported a 14.5% YoY growth in worldwide shipments adjusted for working-day variances. Overall headline exports grew 5.1%, above economists’ 3.7% forecast. Overall imports fell 10.8%, creating a $4.5 billion trade surplus.
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South Korea’s December Exports to the US Surpass China, Reflecting Changing Trade Dynamics
South Korea sold $11.3 billion to the US in December, topping $10.9 billion to China. This development may reflect closer connections with Washington and Beijing’s economic problems. Importantly, one month of data may not prove a durable trading pattern shift. China is South Korea’s greatest trading partner due to its enormous imports, despite this transition.
South Korea’s export sector recovered from a yearlong decline due to rising worldwide demand for electronics, cars, petrochemicals, and shipbuilding. South Korean semiconductor exports rose 21.8% YoY in December due to rising memory chip prices driven by demand for artificial intelligence and new technologies.
South Korea’s exports are recovering, but risks remain. Geopolitical tensions like the Israel-Hamas conflict and rising protectionism are expected to hinder global economic growth.
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South Korea Faces Trade Challenges Amidst US-China Rivalry and Global Economic Uncertainties
China’s concentration on indigenous semiconductor and smartphone production complicates matters. US-China rivalry and US initiatives to lessen dependence on China in global supply chains may affect South Korea, caught between their two biggest trading partners.
According to the Korea International Trade Association, South Korea’s exports will expand by 7.9% to $680 billion in 2024, while imports will rise by 3.3%, creating a $14 billion trade surplus. Global economic conditions and demand changes will continue to affect South Korea’s export outlook.
READ ALSO: South Korea Exports Accelerate as Shipments to US Overtake China
