South Korea Bends To Trump's Trade Demands To Dodge Steel Tariffs

Vice Premier Han Zheng touches on the issue of tariffs in a speech

When asked about Trump's method of using tariffs as a negotiating tactic, Mnuchin mentioned the agreement with South Korea as an example of how the president's approach was working.

The import quota is equivalent to 74 percent of last year's South Korean steel exports to the United States.

But the impact of the tariffs is increasingly in question - most major USA trading partners have been granted exemptions, at least temporarily, meaning the upside for domestic producers in the United States could be limited.

In exchange for the exemption, South Korea will open its markets to USA -manufactured autos, expanding the number of cars it imports per manufacturer to 50,000, from 25,000.

On steel, South Korea accepted an annual export quota of 2.68 million tonnes to the U.S., 70 percent of its average shipments in the last three years.

The bilateral trade deal between the two countries is known as Korus.

Trump pulled out of the 12-nation Trans-Pacific Partnership trade pact a year ago and said that he would focus on negotiating new bilateral deals with countries around the world.

The other results of KORUS FTA renegotiation include tariff elimination starting from not 2021 but 2041 regarding pick-up trucks.

Japan, along with China, was not granted a reprieve.

It was announced last week that South Korea would receive a temporary exemption to the US' 25% tariff on steel imports and 10% tariff on aluminum imports, which took effect March 23.

Seoul is the third-largest steel exporter to Washington.

Korea's trade surplus with the U.S. was about $18bn past year, down from $23bn in 2016, according to the Korea International Trade Association.

Kim said on Monday that amendments were agreed to, although he did not elaborate except to state that South Korea made no concessions on its agriculture markets and there were no changes to existing tariffs. It was up from 25,000 vehicles under the current deal.

Peace House is a three-storey building built in 1989 that has already hosted several high-level inter-Korean meetings, including one in January to discuss North Korea's participation in the Winter Olympic Games, held in South Korea's PyeongChang county.

The resolution of these trade disputes, which have created tension in an important bilateral relationship at a crucial time in dealings with North Korea, allow the USA and South Korea to face North Korea from a more stable, unified position.

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. "I think South Korea fared well despite the United States offensive".



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