U.S. to instate a 15% customs duty on South Korean products
In a significant development, a trade deal between the United States and South Korea was announced by former President Donald Trump. Here are the key points of the agreement and the reactions it has garnered.
The deal includes a 15% tariff on South Korean goods entering the US, notably cars and car parts. Conversely, US goods exported to South Korea will remain tariff-free. South Korea is expected to invest $100 billion in liquefied natural gas or other energy products from the US, and has committed to making a "large sum of money" available for investments in the US.
The deal has marked South Korea as the US’s sixth-largest trading partner, with prior trade volumes of $131.5 billion in imports from South Korea and $65.5 billion in US exports to South Korea. South Korea has also agreed to open its market to US automobiles, aligning with Trump’s trade agenda of reducing trade imbalances and protecting US manufacturing sectors.
However, the South Korean government has not publicly confirmed the details of the deal as of the announcement date. The exact mechanisms of how South Korea would deliver the $350 billion investment remain unclear, but this large investment commitment was a recurring feature in several recent trade deals the Trump administration announced around the same time, including with Japan.
Protests were held at the US embassy in central Seoul, with civic groups, including farmers and labor organizations, opposing Trump's "madman strategy." Demonstrators held signs reading "No Trump! No King!" and pointed out that there might be additional negotiations when Lee Jae-myung meets Trump.
Lee Jae-myung, the President of South Korea, stated that the deal has eliminated uncertainty surrounding export conditions and ensured that US tariffs on South Korean exports are either lower than or equal to those imposed on major trade competitors. He also called the deal "the first major trade challenge" since his administration took power.
The leaders' White House meeting will be the first since Lee Jae-myung assumed the presidency in June. Trump offered congratulations to his South Korean counterpart for his "electoral success." Six major South Korean business associations, including the Korea Chamber of Commerce, view this agreement as a critical milestone that will ease trade-related uncertainties and pave the way for a significant strengthening of economic cooperation between the two countries.
However, not everyone is pleased with the deal. The Korean Apple Growers Association head, Park Sung-hoon, stated that Trump's actions amount to excessive interference in South Korea's domestic affairs. South Korean Minister of Finance Koo Yun-cheol stated that the "Make American Shipbuilding Great Again" proposal made the greatest contribution to the deal.
It's important to note that on the same day, the US imposed 25% tariffs on Indian goods and 50% on those from Brazil. This trade deal between the US and South Korea is part of a series of trade agreements Trump’s administration pursued to restructure trade relations and impose tariffs broadly on countries without reciprocal trade terms.
[1] CNN [2] BBC News
- Critics of the deal, such as the Korean Apple Growers Association, have expressed concerns about what they see as excessive interference in South Korea's domestic affairs by the Trump administration.
- The trade deal between the US and South Korea comes amidst a broader strategy by the Trump administration to restructure global trade relations by imposing tariffs on countries without reciprocal trade terms.
- The deal between the US and South Korea has garnered significant attention in the general news, politics, and crime-and-justice sectors, with protests held at the US embassy in Seoul and reactions from various South Korean business associations.
- While the South Korean government has not yet confirmed the details of the deal, it has been stated that the deal will have an impact on war-and-conflicts, policy-and-legislation, and migration, as the investment commitment of $350 billion by South Korea may be used for various purposes beyond energy and US investments, such as addressing war-torn countries and aiding in migration policies.
