Trump says US to impose 15% tariff on South Korean goods
(Bloomberg) — President Donald Trump said he reached a trade deal with South Korea that would impose a 15% tariff on its exports to the US and see Seoul agree to $350 billion in US investments.
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'We have agreed to a Tariff for South Korea of 15%. America will not be charged a Tariff,' Trump said in a post to his social media platform on Wednesday.
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The investment fund Trump announced evokes a similar $550 billion account pledged by Japan in a successful bid to lower its threatened tariffs. As with the Japanese pledge, likened to a sovereign wealth fund, spending from the South Korean account on investments in the US would be directed by Trump himself, the president said.
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Trump also said South Korea had agreed to 'accept American product including Cars and Trucks, Agriculture, etc.' That is likely to take the form of an agreement by Seoul to accept cars and trucks built to US motor vehicle safety standards, without subjecting them to additional requirements.
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Officials in Seoul confirmed the agreement and said it includes the same 15% discounted tariffs on automobiles — a key point of tension in recent negotiations between the countries. The deal also avoided opening the South Korean market further to US beef and rice exports, senior presidential secretary Kim Yong-beom said in briefing in Seoul Thursday.
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Although automobiles and auto parts would be given the lower 15% rate, US Trade Representative Jamieson Greer told Bloomberg News that steel and aluminum would not be subject to a similar discount under the Korea trade deal.
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South Korea will purchase $100 billion in liquefied natural gas or other energy products, Trump said. The pledge comes on top of a European Union promise to buy $750 billion of American energy over three years — and amid increasing questions about how the US can fulfill the volumes being established in the country's trade frameworks with other nations.
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Trump has emphasized investments in the US and purchase commitments — especially those tied to the nation's oil and gas bounty — in reaching framework trade agreements.
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The 15% tariff rate for South Korea is the culmination of months of talks and helps Seoul — the US's sixth-biggest trading partner — avert a 25% levy that was set to take effect Aug. 1, alongside fresh penalties for dozens of US trading partners.
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The negotiations were especially delicate for the young government in South Korea, as President Lee Jae Myung considered allowing the US greater access to South Korea's beef and rice markets — a politically sensitive topic that spurred widespread protests back in 2008.
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