As President Donald Trump railed against a growing trade deficit last year, two countries in Asia quietly cut their bilateral surpluses with the U.S. 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 U.S. in 2017 by raising imports of U.S. goods, long before Trump announced tariffs aimed at offsetting the U.S. deficit and balancing trade with partners.
Shortly after Trump’s inauguration in January 2017, South Korea said it would increase imports of U.S. energy and high-tech machinery. It ended up more than doubling its purchases of U.S. 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 U.S. declined by 6 percent and 16 percent, respectively, in 2017. The result was that South Korea’s surplus in goods trade with the U.S. tumbled by 23 percent last year from 2016 to $18 billion, according to South Korean data. The Korean numbers differ from U.S. 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 U.S. 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 U.S. as well, by 6.1 percent to $22.9 billion, as it took delivery of defense 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.