Just a day after President Donald Trump threatened to raise tariffs on South Korea, he softened his stance, suggesting the increase wouldn’t happen.
Trump claimed that the South Korean government was failing to live up to an agreement reached between the two countries in July. The trade deal aimed to even the playing field with tariffs sitting at 15 percent. The South Korean government had been dragging its heels on giving its official approval.
Threatening to raise tariffs to 25 percent on South Korean exports to the U.S., including cars, clearly had an impact. South Korea’s parliament is now expected to approve the deal by the end of February.
Officials within the South Korean finance ministry will keep the Trump administration apprised of the trade deals progress as it wends its way through the country’s legislative process, CNBC reported.
The day after the moves, Trump told reporters Wednesday, “ We’ll work something out with South Korea.” The push for change came because of a South Korea’s $65 billion surplus with the United States.
The deal included a pledge by the South Korean government to create a $350 billion private investment firm aimed at expanding its commitment to the U.S. as well as increasing the number of U.S.-built vehicles it allows to be imported into South Korea.
By pledging to get the deal passed by the end of next month, South Korean automakers like Hyundai, Kia, and Genesis can breathe a little easier. They won’t have to figure how to deal with the increased costs on their vehicles for U.S. consumers.
[Images: WhiteHouse.gov, Hyundai]
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