USA and South Korea agree exemption from Trump tariffs

USA and South Korea agree exemption from Trump tariffs”

The agreements in principle were announced Monday just hours after Trump said the United States was on the verge of amending its trade agreement with South Korea, which took effect in 2012.

Although the renegotiated trade deal appears to heavily favour the USA, the South Korean Government will no doubt be delighted to become the first U.S. ally to avoid Trump's newly enforced tariffs.

Seoul Korea's trade surplus with the USA was about US$18 billion previous year according to the Korea International Trade Association.

In a statement published Monday, the South Korean Trade Ministry said it had agreed to adhere to a quota of 2.68 million tons of steel exports to the United States a year, which it said was roughly equivalent to 70 percent of its annual average sales to the United States from 2015-17.

Under KORUS revisions, USA automakers will be able to bring into South Korea 50 000 vehicles per automaker per year that meet United States safety standards, not necessarily Korean standards, up from 25 000 vehicles previously.

South Korean steel companies said had wanted a larger quota of tariff-free exports to the United States.

Commerce Secretary Wilbur Ross said Washington and Seoul were also near agreement on the steel and aluminium tariffs which Trump recently imposed. "We can now solidify the already water-tight cooperation between South Korea and the U.S.".

South Korea's trade minister Kim Hyon-chong speaks during a briefing at the Foreign Ministry in Seoul.

Seoul has agreed to double the import quota on American-made cars, as well as reduce the total amount of steel it exports to the USA annually by adhering to a quota of 2.68 million tons of steel (roughly 70 percent of its average for the past three years).

The US will maintain tariffs on Korea's exports of pick-up trucks until 2041, from the previously agreed 2021, according to the ministry's statement.

"So there's a finite end to it", the USA mill source said.

South Korea also will ease emission standards for American cars shipped from 2021-2025, when the Asian country is due to set new import regulations.

The U.S. government exempted the import duty in return for additional opening of the South Korean automobile market.

"I don't see a high chance of auto makers expanding USA imports", he said.

Kim said no auto makers previously exceeded the 25,000-vehicle threshold a year. The United States has prioritized reducing its trade deficits with other countries; in 2016, it had a $17 billion deficit with South Korea.

The two allies started discussing how to amend the free trade pact in August after Trump blamed it for causing the US trade deficit with South Korea.

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