Koreans are understandably fed up with the disrespectful treatment.
n 2012, the U. S. and South Korea ratified the Korea-U. S. Free Trade Agreement, known as KORUS. It had been negotiated and signed in 2007, when George W. Bush was president. It languished until 2010, when then-President Barack Obama decided it would be a good idea to let it take effect. But first, for reasons more political than economic, Obama said it needed to be renegotiated.
That didn’t go over well with the Koreans. They said a deal’s a deal. But they agreed to talk and ended up making some concessions, mostly having to do with U. S. auto imports.
In 2016, the U. S. trade deficit with South Korea was $27.6 billion, $10 billion higher than in 2012. President Trump saw this is evidence that KORUS was unfair to the U. S., so he demanded that it be renegotiated yet again.
Unlike Obama, Trump used threats and ultimatums to compel the Koreans to agree to talk. He threatened to withdraw from KORUS, which he called “a horrible deal,” and to pull the 28,500 U. S. troops out of the country. So, the Koreans again came back to the table and grudgingly made more concessions, mostly having to do with steel exports to the U. S. and auto imports therefrom.
End of story? No.
South Korean President Moon Jae-in is in Washington today to talk with Trump about the North Korean nuclear threat. Also on his mind, no doubt, is Trump’s threat to impose a 25% tariff on auto imports. The U. S. is an important market for Hyundai and Kia and a 25% tariff on their imports here would hurt them.
For 60 years, South Korea has bent over backwards to accommodate the United States and to burnish the two countries’ alliance. It sent troops to help fight the American wars in Vietnam, Iraq and Afghanistan. It has continually increased its annual spending to help offset the costs of keeping U. S. troops there. And, it is regularly one of the United States’ top customers for military hardware and weapons.
No student of history, Trump probably has no idea what a close friend South Korea has been to the United States. It and Japan are the only allies the U. S. has in East Asia. He has no understanding of the importance of the United States maintaining a strong economic and security presence in that part of the world. If he did, he wouldn’t have torn up the Trans-Pacific Partnership and tossed it in the trash during his first week in office. The TPP was antithetical to Trump’s “America First,” anti-globalism agenda.
The 25% car tariff that Trump has threatened to impose is not aimed at Korea. It’s aimed more at the European Union, which has a 10% tariff on auto imports. The U. S. tariff is 2.5%. Under KORUS, American cars go to Korea duty-free and vice versa.
