US and South Korea reach agreement on trade, steel tariffs

South Korean Trade Minister Kim Hyun Chong speaking to the media after arriving at Incheon International Airport on March 25, 2018.
South Korean Trade Minister Kim Hyun Chong speaking to the media after arriving at Incheon International Airport on March 25, 2018.PHOTO: EPA-EFE

SEOUL (BLOOMBERG) - The US and South Korea reached an agreement on revising the allies’s six-year-old bilateral trade deal and President Donald Trump’s plan to impose tariffs on imported steel, Treasury Secretary Steven Mnuchin said.

Mnuchin said US Trade Representative Robert Lighthizer reached “a very productive understanding” with South Korea on the tariffs to reduce imports and the existing trade deal known as Korus.

“We expect to sign that agreement soon,” Mnuchin said on the “Fox News Sunday” program. “South Korea will reduce the amount of steel that they send into the United States as a part of this.”

Mnuchin called the agreement “an absolute win-win.”

Trade Minister Kim Hyun Chong, arriving back in South Korea from a meeting with counterparts in the US Treasury, also said trade negotiators from the two countries agreed “in principle” on both issues.

While not elaborating, Kim said South Korea made no concessions to further open its agricultural market to US exporters – something he described as a red line.

He added that there’s been “no retreat” on tariffs removed in Korus.

Friction over Korus came about when Trump started to blame the US's large trade deficit with South Korea on the agreement.

The issue has been seen as a potential wedge between the allies as both their leaders plan for expected meetings with North Korean leader Kim Jong Un. 

South Korea’s trade surplus with the US was about US$18 billion last year, down from US$23 billion in 2016, according to the Korea International Trade Association.

Cars accounted for more than 70 per cent of the value of the surplus.

The Trade Ministry said Kim will brief on the outcome of the trade negotiation to media Monday morning. Kim’s comments were reported earlier Sunday by Yonhap News Agency.