Korea’s Trade Structure since 2010 and Implications for Economic Security

As global trade uncertainty intensifies, Korea’s immediate exposure to U.S. tariffs has drawn significant attention. Yet KDI’s Dr. Sunghoon Chung argues that the deeper challenge is structural. Since the 2010s, Korea has shifted from a surplus with China to a deficit, while its surplus with the U.S. has expanded sharply. At the same time, export dependence on the U.S. and import dependence on China have both increased, with trade gains and vulnerabilities becoming more concentrated in a limited number of countries and products.

Rising Concentration, Greater Vulnerability

The author finds that Korea’s deteriorating trade balance with China reflects broad-based growth in manufactured imports, while its expanding surplus with the U.S. is driven largely by a few sectors, especially automobiles, semiconductors, and machinery. Compared with other major economies, Korea also shows relatively high trade concentration by country and product. This pattern may improve efficiency in the short term, but it also heightens exposure to external shocks.

Why Economic Security Matters

These structural changes carry several economic security risks. Greater reliance on Chinese imports may deepen supply chain vulnerabilities in both existing and future strategic industries. Increased import competition may also put pressure on domestic manufacturing, employment, and job quality. Meanwhile, Korea’s growing surplus with the U.S., concentrated in a small number of visible products, may increase the likelihood of becoming a target of U.S. trade measures. The report further warns that dependence on a few countries and products can amplify macroeconomic instability.

A Longer-Term Policy Response

To address these risks, the author calls for a broader diversification strategy. Korea should expand trade ties beyond the U.S. and China, deepen existing agreements, and accelerate accession to the Trans-Pacific Partnership (CPTPP). It also recommends stronger support for firms seeking to diversify sourcing and export destinations, along with policies that reinforce domestic production capacity in strategic sectors. In parallel, the report stresses the need for stronger monitoring of unfair trade practices and better adjustment support for firms and workers affected by trade shocks.

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