New Delhi/Seoul: As President Donald Trump railed against a growing trade deficit last year, two countries in Asia quietly cut their bilateral surpluses with the US It’s unclear what they got 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, 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 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% and 16%, respectively, in 2017. The result was that South Korea’s surplus in goods trade with the US tumbled by 23% 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% 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 US 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 US tariffs on steel and aluminium, although officials have said they will continue to seek one. Still, the nation’s steel and aluminium exports to the US totaled only $680 million in fiscal 2017, a sliver of its $12.5 billion in total metal exports. Bloomberg