President Trump: Trade Deal in Principle Reached with South Korea

People visit the south lawn during the annual White House Spring Garden tours in Washington

People visit the south lawn during the annual White House Spring Garden tours in Washington

According to early reports, South Korea will double - to 50,000 - the number of American cars that can be sold without restrictions. On Monday, Seoul declared a revamped trade agreement had been reached. The tariff was set to expire in 2021 under the existing trade agreement, which came into force in 2012.

South Korean President Moon Jae-In (R) shakes hands with U.S. President Donald Trump (L) during the joint press conference at the presidential Blue House on November 7, 2017 in Seoul, South Korea.

The agreement also address Korean steel sold in the US and other hot-button trade issues.

South Korean 10,000 won note is seen on US 100 dollar notes in this picture illustration taken in Seoul, South Korea, Dec. 15, 2015.

As a country that relies heavily on exports, South Korea has intervened in the foreign exchange market to keep the won weak, but a currency pact could make such steps harder to take.

The deal is expected to permanently exempt South Korea from Trump's tariffs of 25 percent on steel and 10 percent on aluminum, but South Korea will have to reduce its steel exports to the United States by 30 percent from its average over the past three years to about 2.68 million tons.

South Korea was one of several countries that received an initial exemption from broad USA tariffs on steel and aluminium last week.

"Today's announcement demonstrates the Administration's commitment to strengthening our relationship with Korea", said Rep. Kevin Brady, R-Texas, "And increasing our competitiveness in the Asia-Pacific region". He has granted temporary exemptions to several other United States allies, including Canada, Mexico and the European Union.

South Korean Trade Minister Kim Hyun-chong speaks to the media in Seoul, on March 26, 2018.

"Despite the touted 10,000 tariff cuts and promises of more exports, more jobs, our deficit nearly doubled in the FTA's first five years as USA agricultural exports declined and a flood of Korean cars were shipped here".

South Korea will no longer require additional testing for US vehicles certified to meet USA standards. While the plan had limited additional funds for innovative drugs to Korean companies, it will include higher payments for innovative American-made drugs as well starting this year.

"Under KORUS, most USA pork products now enter Korea duty-free". It was further reported by the officials that this deal would not require congressional approval. One official said the changes will "create a suite of outcomes that are going to make it a lot easier for our auto companies to compete on a level playing field there in Korea". This is typical behavior, this whole 'using trade as a lever to get a better deal for U.S. corporations.' It's not really about limiting imports to the US.

Rep. Terri A. Sewell, D-Ala., told Lighthizer she and other members of Congress anxious that changes to KORUS could have financial repercussions in their districts.

While the United States posted a trade surplus of $10.7 billion with South Korea in the services sector, it recorded a goods trade deficit of $27.7 billion in 2016, leaving an overall deficit of $17.0 billion.

"There are lots of members of Congress who will be directly impacted by any changes in that agreement, like my district", Sewell said, alluding to the Hyundai vehicle plant. Capital Economics says no Korean automaker exports pickup trucks to the United States at the moment.

USA exports to Korea declined 7.8 percent ($3.7 billion) and imports from Korea increasing 13.1 percent ($8.1 billion) by the end of KORUS' fifth year.

The president said in a tweet Wednesday, the country's trade representative announced a great deal for American and Korean workers.

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