IMPROVING BAD TRADE DEALS: President Donald J. Trump has fulfilled his promise to fight for American workers and businesses in an amended trade deal with South Korea.
- Since the U.S.-Korea Trade Agreement (KORUS) went into effect in 2012, the U.S. trade in goods deficit has increased from $13.2 billion to $22.9 billion, an increase of 73 percent.
- Since KORUS came into effect, the overall trade deficit between the United States and Korea increased from $6.3 billion to $10.7 billion, a 70 percent increase.
- In July 2017, at the direction of the President, U.S. Trade Representative (USTR) Robert Lighthizer initiated discussions to amend KORUS, setting off multiple rounds of negotiations in 2017 and 2018.
LEVELING THE PLAYING FIELD: The Trump Administration has secured key improvements to KORUS that will protect jobs in America’s auto industry and increase U.S. exports.
- As a result of negotiations, South Korea will double the annual number of American automobiles – from 25,000 to 50,000 per manufacturer per year – that can enter its market using U.S. safety standards.
- South Korea is simplifying the sales environment for U.S. cars and parts by taking into account U.S. environmental and emissions standards.
- American vehicles will be able to meet South Korean emissions standards based on U.S. emissions tests, avoiding additional or duplicative testing.
- South Korea will recognize U.S. standards for auto parts necessary to service U.S. vehicles, and will reduce labeling burdens for auto parts.
- South Korea will expand the number of “eco-credits” available for U.S. automakers to meet South Korean emissions standards.
- When setting fuel economy standards in the future, South Korea will take U.S. corporate average fuel economy regulations into account and will continue to include more lenient standards for smaller volume exporters.
- South Korea will extend the phase out of the 25 percent U.S. tariff on trucks until 2041, well beyond the current phase out date of 2021.
CUTTING THE RED TAPE ON U.S. EXPORTS AND HOLDING TRADE PARTNERS ACCOUNTABLE: The Trump Administration’s negotiations will eliminate burdensome South Korean regulations that have impeded U.S. exports and ensure that trade partners follow through on implementation.
- South Korea has agreed to address issues with onerous and costly customs procedures that have hindered U.S. exports.
- South Korea has agreed to change its pharmaceutical reimbursement policy for innovative drugs to give fair treatment for U.S. exports by the end of this year, consistent with its KORUS obligations.
DEFENDING AMERICAN STEEL: Outside the context of KORUS, the Trump Administration has reached a deal with South Korea to protect American steel manufacturers and national security.
- On March 8, 2018, after receiving a report and recommendations from Secretary of Commerce Wilbur Ross, President Trump announced tariffs on imported steel and aluminum under Section 232 of the Trade Expansion Act of 1962, as amended, in order to defend America’s national security.
- The Trump Administration has reached satisfactory alternative means with South Korea to address U.S. concerns.
- South Korean steel imports into the United States will be limited to a product-specific quota equal to 70% of that country’s average annual import volume from 2015 through 2017.
UNFAIR CURRENCY PRACTICES: Outside the context of the KORUS, the Trump Administration is working to ensure that American goods are treated fairly and that our trading partners avoid unfair currency practices.
- On a separate track, the Treasury Department is finalizing an understanding with South Korea to avoid practices that provide an unfair competitive advantage.
- The provisions of the understanding include strong commitments on exchange rate practices, robust transparency and reporting, and a mechanism for accountability.