The U.S. and South Korea announced they have agreed to amend the decade-old free-trade pact between the two countries. Under the changes to the U.S.-Korea Free Trade Agreement (KORUS), South Korea agreed to limit its steel exports to the U.S. and made concessions on auto imports. The U.S. agreed to exempt South Korea from the 25% tariff on steel that President Trump announced earlier this month.
Under the new plan, South Korea will reduce its exports of steel to the U.S. by 30%, and accept more imports of U.S. autos. The limit of autos exported from the U.S. will be raised to 50,000 vehicles per year from each U.S. automaker, up from 25,000 previously. However, analysts say that provision is unlikely to have a major impact soon as no U.S. automaker sells more than 11,000 vehicles in South Korea.
While the amended trade deal focused on steel and autos, it was also a relief to the U.S. beef and pork industries, who feared Trump’s proposed tariffs on steel and aluminum could disrupt trade.
“The announcement of a successfully revised KORUS trade agreement comes as excellent news for the U.S. beef and pork industries because it helps ensure that we will continue to be able to serve the growing South Korean market and a critically important customer base,” U.S. Meat Export Federation President and CEO Dan Halstrom said.
“The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier. U.S. red meat exports to Korea set a record last year of $1.7 billion, up 19 percent year-over-year and up 69 percent from 2012.”
Halstrom said under KORUS, most U.S. pork products now enter Korea duty free.
“The duty on U.S. beef has been reduced from 40 percent to 21.3 percent and will continue to decline each year until it is eliminated by 2026. It is especially important that these tariff rate reductions are maintained, because the other major pork and beef suppliers to Korea also have free trade agreements with similar market access terms.”