The Trump administration said it has widened U.S. access to South Korea's car market while providing American manufacturers protection from South Korean imports.
The United States and South Korea have reached an agreement to overhaul the 6-year-old U.S.-Korea Free Trade Agreement, senior administration officials said Tuesday, confirming an announcement earlier in Seoul. President Donald Trump had called the original Korea pact a job killer.
The new deal doubles - to 50,000 - the cars each U.S. automaker can export annually to South Korea, reduces bureaucratic barriers to American products and extends a 25 percent U.S. tariff on South Korean pickup trucks by 20 years, through 2041.
In this Friday, Oct. 6, 2017, photo, new Sonatas sit outside a Hyundai dealership in the south Denver suburb of Littleton, Colo. The Trump administration said Tuesday, March 27, 2018, it has widened U.S. access to South Korea’s car market while providing American manufacturers protection from South Korean imports. (AP Photo/David Zalubowski)South Korea escapes America's new 25 percent tariff on imported steel but must accept quotas on steel exports equal to 70 percent of its average annual shipments to the United States from 2015 to 2017.
The senior administration officials spoke to The Associated Press on condition of anonymity to discuss the policy ahead of an official announcement.
The United States this month began imposing the steel tariffs, saying imports jeopardized U.S. national security. But it has been suspending the duties on allies like the European Union, Canada and Mexico.
The U.S. Treasury Department is also in talks on a deal to prevent Seoul from deliberately pushing its currency lower to give South Korean exporters a competitive advantage. A formal agreement on currency would be unprecedented - but it would include no enforcement mechanism.
The U.S. trade deficit in goods with South Korea - nearly $23 billion last year - widened after the original pact took effect in 2012, one reason Trump has denounced it. Trade in autos has been especially lopsided: South Korea last year exported to the United States 929,000 passenger vehicles worth $15.7 billion. By contrast, the U.S. shipped to South Korea fewer than 53,000 autos, worth just $1.5 billion, according to the U.S. Commerce Department.
The United States says South Korea has used nontariff barriers, such as rigorous customs inspections, to block U.S. products.
Trump's complaints about South Korean trade practices have caused friction between the two allies at a crucial time, as he prepares for a meeting with North Korea's reclusive leader, Kim Jong Un.
Unions at South Korea's two largest automakers, Hyundai Motor Co. and Kia Motors Corp., have already blasted the new agreement for blocking access to the fast-growing U.S. pickup truck market. "It is a humiliating deal that accepts Trump's strategy to pre-emptively block South Korean pickup trucks," Hyundai Motor Co.'s labor union said in a statement.