South Korea announced Monday that it had reached a deal with the United States and would be exempt from the global steel tariffs imposed by the Trump administration. Instead, South Korean steel imports will be limited by quotas, which will cut the country’s exports of steel to the U.S. by 30 percent.
Korea is the third-largest exporter of steel to the United States, exporting about 2.7 million tons of steel a year. It will also be the first U.S. ally to be awarded an exemption to the tariff without a time limit. Under the agreement, South Korea would also double the number of U.S. cars that it would allow to be imported.
The deal was reached by agreeing to changes in the U.S.-Korea Free Trade Agreement.
President Donald Trump announced March 1 that the United States would be imposing a 25 percent tariff on all steel imports, and a 10 percent tariff on all aluminum imports. More than 100 Republican members of Congress signed a letter criticizing the move.
When the tariffs were first introduced, they were met with backlash from across the globe. Since then, a number of countries have received either full or partial exemptions, but they have all come with time limits. South Korea is the first nation to get a permanent exemption.
The European Union: When the tariffs were first announced, the European Union responded by threatening to impose tariffs of its own on American-made products, including bourbon, blue jeans, and motorcycles. U.S. exports to the E.U. amount to around $3.4 billion annually. Unlike South Korea, the E.U. was granted only a temporary exemption, until trade deals can be renegotiated.
Canada and Mexico: Trump has said that he will give Canada and Mexico a 30-day exemption from the tariffs until the North American Free Trade Agreement is renegotiated. If a new NAFTA deal is signed, “there won’t be any tariffs on Canada and there won’t be any tariffs on Mexico,” Trump promised. However, he warned that “if we don’t make a deal on NAFTA,” the tariffs would go into effect.
Argentina, Australia, and Brazil: So far, these three other nations have also gotten temporary reprieves.
