Korea’s swelling trade surplus with US could make it a target for Trump

US President Donald Trump points to a reporter while taking questions in the White House briefing room on Nov. 9, 2026. (AP/Yonhap)

Korea is preparing to mark a historic milestone as exports approach US$1 trillion for the first time, potentially as early as next week, with the Ministry of Trade, Industry and Resources weighing which export site to open to the media for the occasion.

The biggest driver of the breakthrough is, without question, semiconductors. While the industry carries significant symbolic weight, the government is wary of highlighting Korea’s heavy reliance on semiconductors. The concern is particularly acute for exports to the US, where semiconductors account for a sizable share. 

In October, Korea’s exports to the US jumped 185.8% year-on-year to US$24.9 billion, with semiconductors making up nearly a quarter of the total at US$5.81 billion. Semiconductor exports alone soared 497%. 

Meanwhile, Korea’s trade surplus with the US is on track to hit US$130 billion in 2026, accounting for 35% of its projected overall trade surplus. Analysts warn that US President Donald Trump, beset by political headwinds following midterm election losses and the controversy surrounding Nvidia CEO Jensen Huang, could turn his sights to Korea’s swelling trade surplus with the US. 

The US could seize on the figures to amp up pressure on Seoul for additional investment in the US, whether through participation in the Alaska gas pipeline project or demands for further expansion of semiconductor fabs on American soil.

According to data released Wednesday by the Korea Customs Service, Ministry of Trade, Industry and Resources, and the Korea International Trade Association, Korea’s trade surplus with the US reached a provisional US$106.3 billion as of Tuesday, accounting for 35% of its overall trade surplus of US$303.7 billion.

During Trump’s first presidency, Korea’s annual trade surplus with the US stood at US$17.9 billion in 2017, US$13.9 billion in 2018, US$11.5 billion in 2019, and US$16.6 billion in 2020. It widened under the Biden administration, climbing from US$22.7 billion in 2021 to a record US$55.6 billion in 2024, Biden’s last year in office.

The surplus contracted slightly to US$49.5 billion in 2025, the first year of Trump’s second term, but had already breached the US$100 billion mark by October 2026. At the current pace, it could top US$130 billion and approach US$140 billion by the end of the year.

The shift comes as Korea’s trade structure undergoes a broader realignment, as supply chains have been reconfigured around the US, and its once-substantial trade surplus with China, which persisted into the early 2020s, has given way to a deficit. The resulting surge in the surplus with the US has also been particularly pronounced. 

According to trade figures compiled by the US Commerce Department’s Bureau of Economic Analysis, the list showing US’ largest sources of trade deficits through January to September indicates that the US had the highest deficit with Vietnam (US$190.9 billion), followed by Mexico (US$184 billion), Taiwan (US$171.1 billion), China (US$131.5 billion), Thailand (US$84.9 billion), Korea (US$67.3 billion), Germany (US$50 billion), Canada (US$38.7 billion), Malaysia (US$38 billion) and India (US$37.6 billion). 

While Korea ranked 10th in 2025 with a trade deficit of US$56.4 billion for the US, it has climbed four places in just a year. 

The only economies the US can lean on to extract economic and security costs of maintaining global supply chains for advanced industries are Korea and Taiwan. Seoul’s enormous trade surplus could also weigh on the outcome of Washington’s probe into “structural excess capacity and production” launched against Korea and other economies under Section 301 of the Trade Act.

“The structural excess capacity and production probe is ultimately about using tariffs to lure industries to the US. The US will wield it as leverage to steer investment into the country on its own terms,” said Jahng Jeong-ju, a partner at law firm Yoon & Yang and an expert on international trade.

Kim Se-jin, a senior foreign attorney at Shin & Kim LLC who previously handled trade policy in the Korean government, offered a different opinion. 

“It would be difficult for the US to demand additional semiconductor fab construction beyond what Korean companies have already factored into their investment plans. There is a difference between Trump muttering a throwaway remark because he is displeased and that remark actually translating into policy,” he said. 

“We have made so much money; the US is using that as an opportunity to make demands,” acknowledged Lee Jun, head of the Korea Institute for Industrial Economics and Trade’s Strategic Industries Research Center.

“Once the expansion of SK Hynix’s Yongin fab is completed next year and additional output comes online, Korea will ultimately be in a position to control supply volumes,” he noted. “In a situation where Korean companies are reaping the profits of an industry built on US technology while costs are being passed directly on to US Big Tech firms, we need to make sophisticated political calls to ensure that nothing crosses a critical threshold.”

In essence, Lee suggests that Korea must walk a fine line: maintain its partnership with the US through careful management of semiconductor supply volumes and operating margins while leveraging its strategic position as an ally in the US’ efforts to contain China.