The Trump administration has renegotiated and signed a new trade deal with the country of South Korea. Deemed KORUS, automakers applauded the administration’s efforts to tackle trade as many fear the worst for a new trilateral NAFTA (North American Free Trade Agreement) deal.
The Detroit News reported Tuesday the Trump administration claimed victory with the renegotiation as it continues to reevaluate the United States’ trade agreements and partners. President Trump and his administration have launched an aggressive trade war with China, which proponents say is long overdue, and negotiations continue over NAFTA.
The new South Korea-U.S. agreement will see the number of U.S. auto exports allowed to enter South Korea without safety modifications rise to 50,000, up from 25,000 cars. U.S. auto exports still pale in comparison to South Korean exports, however.
Perhaps most importantly for American automakers, a 25 percent tariff on trucks will remain in place until 2041. The tariff notably protects General Motors, Ford and Fiat-Chrysler from other automakers building trucks and exporting them to the U.S. at a lower cost. The tariffs were scheduled to expire in 2021 originally.
“It was a long time in coming, and it’s a basic redoing of the agreement that was done before, which was a very unfair agreement for the United States,” President Trump said in a press conference on Monday with South Korean President Moon Jae-in. “And I think that President Moon and myself, we’re very happy. It’s great for South Korea. It’s great for the United States. It’s great for both.”
Although automakers view the agreement as mostly a success, Ford called out the lack of protection against currency manipulation. Detroit automakers have long accused South Korea of manipulating its currency to ensure higher values for its auto companies.
In a statement, GM did not mention currency issues but commended the work on non-tariff barriers.
“General Motors is encouraged by the United States and Korean governments’ continued work to advance U.S.-Korean relations through the signing of the amendments to the Korea-U.S. Free Trade Agreement. We are pleased with, and appreciate, the administration’s improvements to the agreement regarding non-tariff barriers.”