S. Korea’s Current Account Surplus Narrows in April Amid U.S. Tariff Pressure

Seoul: South Korea logged a current account surplus for the 24th consecutive month in April, but the surplus narrowed from the previous month due partly to the impact of the United States’ aggressive tariff scheme, central bank data showed Tuesday. The country’s current account surplus reached US$5.7 billion in April, narrowing from a $9.14 billion surplus the previous month, according to the data compiled by the Bank of Korea.

According to Ethiopian News Agency, South Korea has reported a current account surplus every month since May 2023. During the first four months of this year, the cumulative current account surplus stood at $24.96 billion, compared with $17.97 billion recorded during the same period last year. The goods account logged an $8.99 billion surplus in April as exports climbed 1.9 percent from a year earlier to $58.57 billion, while imports fell 5.1 percent to $49.58 billion.

The services account, however, registered a $2.83 billion deficit in April, according to the central bank. The primary income account, which tracks the wages of foreign workers, dividend payments from overseas, and interest income, logged a $190 million deficit in April. “The impact of U.S. tariff policies is gradually becoming evident in exports of steel, aluminum, automobiles, and auto parts,” BOK official Song Jae-chang said during a press briefing.

“If the tariff effects become more pronounced starting in the third quarter, we may see a decline in domestic production and exports, as production in the U.S. increases,” he added. In April, exports to the U.S. sank 6.8 percent on-year, as U.S. President Donald Trump’s administration began imposing reciprocal tariffs on partner nations, including 25 percent duties on South Korean goods, although the new tariffs were paused shortly afterward to allow for bilateral negotiations.

A separate 10 percent baseline tariff and 25 percent duties on steel, aluminum, and auto-related products remain in place. South Korea and the U.S. have agreed to pursue a “package” deal on trade and other related issues before July 8, when the 90-day pause on reciprocal tariffs is set to expire.