U.S. and South Korean negotiators have reached a preliminary agreement to preserve the six-year-old free trade pact between the two countries that has been very lucrative for U.S. agricultural exports, say Trump administration officials.
The officials say the updated agreement announced last night will be a “huge win” for the U.S. because it will boost exports of cars, trucks and auto parts to South Korea. The Asian country agreed to lift its cap on imports of U.S. trucks and allow the U.S. to extend its 25 percent tariff on Korean trucks.
How much impact the deal will have on auto exports remains to be seen. Korea agreed to allow U.S. automakers to export 50,000 cars per year to Korea, up from 25,000. However, the highest year thus far for U.S. automakers was 2016, when 16,400 passenger vehicles were exported, including golf carts, according to the U.S. Census Bureau.
The deal also settles the issue of U.S. steel and aluminum tariffs, the administration officials said. The proposed U.S. tariff of 25 percent won’t be applied to South Korean steel, but the country did agree to a new quota that’s expected to cut U.S. imports from the country by 30 percent. South Korean aluminum exports won’t be exempt from the 10 percent tariff.
KORUS has helped boost U.S. exports of beef, pork, wheat, corn, sorghum, and other ag commodities and farm groups fought hard to stress the importance of the deal to the Trump administration during negotiations.
The U.S. became the largest beef supplier to South Korea in 2016, thanks to falling tariffs under KORUS. U.S. beef exports to South Korea reached about $1.1 billion in 2017, almost double what they had been five years earlier.
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