The United States on Monday exempted South Korea from tariffs on steel imports, saying the move aligned with its national security interests, Yonhap Newswire reported.
The development comes as the White House gears up for its first summit with a North Korean leader, which US President Donald Trump has said may take place in Panmunjom in the DMZ, and follows the successful conclusion of last Friday’s inter-Korean summit.
Trump had previously announced a 25% tariff on steel imports and a 10% tariff on aluminum imports from all countries. While the moves are ultimately believed to be aimed at the China, with which the United States runs a chronic trade deficit, there have been concerns that US allies such as South Korea and Japan would suffer collateral fallout.
The announcement of South Korea’s exemption should ameliorate those fears among South Korean steel exporters. Even so, the deal is not entirely favorable toward South Korea: It sets an annual import quota of 2.68 million tons, equivalent to 70% of the average of steel exports to the US over the last three years.
Japan, however, has failed to win an exemption, something known to irk Prime Minister Shinzo Abe, who has tried hard to build up a personal relationship with Trump. However, unlike Seoul, Tokyo does not have a free trade agreement with Washington. Its steel exporters have been subject to the tariffs since March.
Washington also said it would delay a decision to impose tariffs on the EU, Canada and Mexico for another 30 days, offering those nations a reprieve and the chances of a deal following further negotiations. The EU has said that if it loses its exemption, it will retaliate with its own tariffs against US imports to Europe.
“Today, President Donald J Trump issued two proclamations authorizing modifications of the Section 232 tariffs on steel and aluminum,” the White House said in a statement. “The administration has reached a final agreement with South Korea on steel imports.”
That agreement was reached last month after Seoul and Washington negotiated an amendment to their free trade agreement, as demanded by the US side and conceded by South Korea with some reluctance. Among other things, the revised FTA grants US automakers greater access to South Korea.
“In my judgment, these measures will provide an effective, long-term alternative means to address South Korea’s contribution to the threatened impairment to our national security by restraining steel articles exports to the United States from South Korea, limiting transshipment, and discouraging excess capacity and excess steel production,” Trump said in his proclamation.
Tariffs on South Korean aluminum exports, however, remain in place.