Global Geopolitical Series: South Korea secures permanent exemption from U.S. steel tariffs

The Trump administration has granted South Korea a permanent exemption from the 25 percent Steel tariffs as the two countries agreed to amend their free trade agreement (FTA), better known as KORUS, which was first signed in 2007 and was signed again after renegotiations in December 2010. The agreement came into effect in 2012.

Under the new agreement, South Korea secured a permanent exemption from the Steel tariffs, and in exchange, it would open up its car market to U.S. companies. South Korea has received a quota of about 2.68 million tons of steel exports, or 70 percent of the annual average Korean steel exports to the U.S. between 2015 and 2017 and that will be exempt from the new tariffs. South Korea and the United States also agreed that U.S. tariffs on Korean pickup trucks will be in place until 2041, extended by 20 years from the previous phase-out schedule of 2021. Moreover, U.S. automakers will be able to bring into South Korea each year 50,000 vehicles (double of current) per automaker that meet the U.S., but not necessarily Korean safety standards.

Both South Korea and the United States were eager to resolve their trade disputes before the much anticipated Kim-Trump summit on the peace in the peninsula, which will be held by May this year.