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Korea talks auto tariffs with U.S.

Sept 26,2019
Korea asked the United States to be exempted from any new auto tariffs after promising to purchase up to $10 billion worth of U.S.-produced liquefied-natural gas (LNG).

Minister of Trade, Industry and Energy Sung Yun-mo argued that Korea should be exempt from auto tariffs at a meeting with U.S. Commerce Secretary Wilbur Ross on Tuesday at the Korean Consulate office in New York. He cited a recently renegotiated FTA between the two countries, according to a statement by the Trade Ministry.

The amended Korea-U.S. FTA signed last year ensures no tariffs on Korean passenger vehicle exports to the United States.

Korea’s request came after U.S. President Donald Trump invoked section 232 of U.S. trade laws to review tariffs of up to 25 percent on vehicles and auto-part imports in May, citing threats to national security.

The deadline on the tariff decision is Nov. 13.

If Korea ends up being hit with tariffs, it is expected to have a major impact on the local auto industry. The United States is the top export market for Korean automakers, accounting for 33.1 percent of Korea’s total auto exports last year.

Trump has complained that the United States suffers from massive trade deficits, including with Korea.

Amid pressure from the United States, state-owned energy company Korea Gas signed a deal with BP on Tuesday to import 4.38 million tons of LNG from the United States starting in 2025 over 15 years. The deal can be extended to up to 18 years, and will cost Korea as much as $9.6 billion.

Hyundai Motor Group also committed $2 billion in investment in the United States on Monday.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]


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