US President Donald Trump has boasted about few things more vociferously than what he describes as his unmatched deal-making chops.
Since the president let loose and began trade offensives across the globe, with traditional friends and foes of Washington, the conflicts have yielded only one concrete result. The Trump administration was able to renegotiate a free trade agreement with Seoul, getting South Korea to give concessions under threat of tariffs on steel and aluminum.
That lone success is now uncertain, pending the Trump administration’s decision on whether to slap tariffs of 25% on auto and auto-parts imports on national security grounds. South Korean lawmakers are saying they will not ratify the renegotiated deal should they not be granted an exemption from the car tariffs.
“In case the US invokes Section 232 to impose additional tariffs on South Korean cars, parliament cannot ratify the revised trade deal,” Hong Young-pyo, the whip of South Korea’s governing Democratic Party, was quoted by The Wall Street Journal as saying.
The basis for the auto tariffs is the same as that for the metals tariffs for which South Korea was previously granted an exemption. The White House argues that it is a national security imperative to have a competitive auto industry, as such, tariffs are needed to protect domestic carmakers.
It is unclear whether the Trump administration will consider granting another exemption, but it is clear what the top US trade official feels about the Section 232 law that is the basis for the auto tariffs, and what its purpose is.
When asked in July whether steel imports from close US allies in Europe, as well as Canada, pose a national security threat, US Trade Representative Robert Lighthizer suggested that if you leave any country out, the policy won’t work.
“In the case of steel, yes, absolutely, because of the nature of the [Section 232] program, for sure. Otherwise, you don’t have a program,” he was quoted by Inside Trade as saying.