According to news reports Tuesday, the United States and South Korea signed a revised free-trade deal. The US-Korea Free Trade Agreement (KORUS) reportedly addresses many trade issues faced by US exporters, mainly automotive producers. Nearly 80 percent of the trade deficit in goods with South Korea is in auto and auto parts. While the previous agreement included barriers to US automotive manufacturers, South Korea has made a number of concessions to the United States on auto exports in the new agreement.
According to the new agreement, the United States will continue to impose a 25 percent tariff on pickup truck imports from South Korea for an additional 20 years, instead of three years under the previous trade deal. South Korea will also increase its annual cap for cars that meet the US safety standards to 50,000 per manufacturer from 25,000.
South Korea also agreed to eliminate regulatory barriers for US auto exporters by aligning their environmental testing standards with those of the United States.
The new KORUS also limits steel and aluminum imports from South Korea. According to the agreement, the United States will impose a 10 percent tariff on aluminum imports. Steel, however, will be subject to a product-specific quota, equivalent to 70 percent of the average annual steel export volume of South Korea in the last three years. South Korea is the third-largest supplier of steel to the US.