US President Donald Trump signed a revised free trade agreement with South Korea on September 24 in New York. This is the first bilateral trade deal of his administration and includes steps to open up the Korean market to more American exports.
The US – Korea Trade Agreement aims to open the Korean market to increased American exports, mainly automobiles. It will also allow the US to impose a 25% tariff on Korean trucks until 2041.
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According to analysts, the agreement contains some provisions that will significantly change the trade balance between the two countries. Namely, it doubles the cap on the number of American automobiles that may be exported to South Korea, from 25,000 a year per automaker to 50,000.
Business groups welcomed the new agreement, but do not think it is transformational. In the same wavelength, Wendy Cutler, a vice president at the Asia Society Policy Institute, who helped negotiate the first Korean agreement during Obama’s administration, noted that the agreement has not been changed dramatically.
Before the agreement, US’s trade deficit with South Korea had already been decreasing. South Korea was also among the countries with steel and aluminum tariffs, something that made those metals less attractive to export to the US.
