South Korea, India cut trade surpluses with US before Trump tariff tantrum
India and South Korea were among a handful of nations worldwide that narrowed their trade surpluses with the US in 2017 by raising imports of US goods long before Trump announced tariffs to offset the US trade deficitbusiness Updated: Apr 04, 2018 14:05 IST
As US President Donald Trump railed against a growing trade deficit last year, India and South Korea have quietly cut down their bilateral surpluses with the US. However, it is unclear as to what they received in return.
India and South Korea were among a handful of nations worldwide that narrowed their trade surpluses with the US in 2017 by raising imports of US goods. This was long before Trump announced tariffs aimed at offsetting the US deficit and “balancing trade” with partners.
Shortly after Trump’s inauguration in January 2017, South Korea had said it would increase imports of US energy and high-tech machinery. It ended up more than doubling its purchases of US semiconductor manufacturing machinery last year to $6 billion, while imports of liquefied natural gas soared to $806 million from only $11 million in 2016, data from the Korea International Trade Association show.
Meanwhile, South Korea’s exports of cars and parts to the US declined by 6 percent and 16 percent, respectively, in 2017. The result was that South Korea’s surplus in goods trade with the US tumbled by 23 percent last year from 2016 to $18 billion, according to South Korean data. The Korean numbers differ from US figures due to different methods of calculation.
Those efforts didn’t stop Trump from insisting on renegotiating their bilateral deal. Trump called the deal unfair, complaining that the US deficit with Korea had doubled since it took effect in 2012.
Even after a new one was reached, though, Trump threatened to hold it as a bargaining chip in negotiations with North Korea. However, Seoul was granted an exemption to Trump’s steel tariffs.
India cut its goods-trade surplus with the US as well, by 6.1 percent to $22.9 billion, as it took delivery of defence purchases that were part of efforts to diversify its sources of military hardware. More than half of its current inventory is Russian-origin equipment.
India’s imports of aircraft and parts from the U.S. more than doubled in fiscal 2017 to $4.24 billion, India’s commerce ministry data show. That included six Lockheed Martin Corp.’s C-130J Hercules military transport planes, according to the state-run Press Information Bureau.
India wasn’t granted an exemption from the U.S. tariffs on steel and aluminum, although officials have said they will continue to seek one. Still, the nation’s steel and aluminum exports to the U.S. totaled only $680 million in fiscal 2017, a sliver of its $12.5 billion in total metal exports.