Taiwan’s trade deficit with South Korea continued to widen in the first nine months of 2022, with imports rising more quickly than exports, the Directorate General of Budget, Accounting and Statistics (DGBAS) reported Tuesday.

Taiwan has long had a trade deficit with South Korea, ranging between US$800 million to US$5.5 billion from 2016 to 2020, the DGBAS indicated, citing statistics compiled by the Ministry of Finance’s Customs Administration.

But it widened in 2021 despite Taiwan’s exports to South Korea increasing 30 percent year-on-year to US$20.14 billion, because imports soared nearly 50 percent to US$30.64 billion, leaving a trade deficit of US$10.5 billion, according to the DGBAS.

The trend continued in the first nine months of this year.

Taiwan’s exports to South Korea rose 18.6 percent year-on-year to US$17.24 billion, accounting for 4.7 percent of total exports, while imports rose 20.5 percent year-on-year to US$26.65 billion.

That resulted in a trade deficit of US$9.40 billion, up 24.3 percent from the same period of 2021.

Taiwan and South Korea sell mostly semiconductors to each other, which are used to power the two economies’ exports of electronic goods to the rest of the world, but South Korea’s dominance in DRAMs seems to have given it an edge in trade balances.

Exports of electric components, which accounted for 67.9 percent of Taiwan’s outbound sales to South Korea, were up 25.7 percent year-on-year in the January to September 2022 period.

Exports of semiconductors (excluding DRAMs), which made up over 90 percent of the total, were up 25.2 percent year-on-year.

Imports of electric components, which accounted for 60.1 percent of all goods Taiwan brought in from South Korea in the nine-month period, were up 24.7 percent year-on-year.

A big part of that was a 45.9 percent increase in imports of semiconductors (excluding DRAMs) and a 1.7 percent increase in imports of DRAMs, which make up about 57 percent and 40 percent of all imports from South Korea, respectively, according to the DGBAS.

Source: Focus Taiwan News Channel