Officials, businesspeople should join forces to win exemption
U.S. President Donald Trump has delayed a decision on whether to impose 25 percent tariffs on imported cars and parts by up to six months. It's a relief that Trump has left open the possibility of negotiations. Had the U.S. leader added the car tariff bomb to the escalating U.S.-China trade war, the reeling global economy might have fallen into uncontrollable chaos. We are disappointed, however, that Washington stopped short of exempting Seoul from future tariffs.
The outlook remains relatively positive, though. Trump said in a proclamation that he was directing the U.S. trade representative to pursue negotiations on cars imported from the European Union and Japan. However, the U.S. leader said he had "considered the renegotiated South Korea-U.S. free trade agreement."
Although Trump did not make explicit a tariffs exemption on Korean vehicles, his positive evaluation of the revised bilateral free trade agreement seemed to prompt foreign media outlets to report the likely exemption of Seoul from the tariffs. The domestic auto industry was able to avoid the worst-case scenario with the delay of auto tariffs and is anticipating the green light for winning an eventual exemption.
It is still too early to remain optimistic. For now, Trump seems satisfied with the revised free trade accord between Washington and Seoul, in which Korea made significant concessions in the auto sector. However, few can rule out the possibility of the protectionist U.S. leader slapping import duties on Korean-made cars by inventing a different pretext. If such concerns become a reality, the nation's carmakers will suffer an enormous setback.
Last year, Korea exported 810,000 vehicles to the U.S., which represented 33 percent of total overseas shipments of assembled vehicles. A 25 percent tariff would push up the prices of Korean cars by up to 12 percent in the U.S. market, causing lost shipments worth 2.89 trillion won ($2.41 billion). That will no doubt deal a fatal blow to regional economies and job creation as well. All this demonstrates why government officials and business executives must join forces to win an exemption by all means.
U.S. President Donald Trump has delayed a decision on whether to impose 25 percent tariffs on imported cars and parts by up to six months. It's a relief that Trump has left open the possibility of negotiations. Had the U.S. leader added the car tariff bomb to the escalating U.S.-China trade war, the reeling global economy might have fallen into uncontrollable chaos. We are disappointed, however, that Washington stopped short of exempting Seoul from future tariffs.
The outlook remains relatively positive, though. Trump said in a proclamation that he was directing the U.S. trade representative to pursue negotiations on cars imported from the European Union and Japan. However, the U.S. leader said he had "considered the renegotiated South Korea-U.S. free trade agreement."
Although Trump did not make explicit a tariffs exemption on Korean vehicles, his positive evaluation of the revised bilateral free trade agreement seemed to prompt foreign media outlets to report the likely exemption of Seoul from the tariffs. The domestic auto industry was able to avoid the worst-case scenario with the delay of auto tariffs and is anticipating the green light for winning an eventual exemption.
It is still too early to remain optimistic. For now, Trump seems satisfied with the revised free trade accord between Washington and Seoul, in which Korea made significant concessions in the auto sector. However, few can rule out the possibility of the protectionist U.S. leader slapping import duties on Korean-made cars by inventing a different pretext. If such concerns become a reality, the nation's carmakers will suffer an enormous setback.
Last year, Korea exported 810,000 vehicles to the U.S., which represented 33 percent of total overseas shipments of assembled vehicles. A 25 percent tariff would push up the prices of Korean cars by up to 12 percent in the U.S. market, causing lost shipments worth 2.89 trillion won ($2.41 billion). That will no doubt deal a fatal blow to regional economies and job creation as well. All this demonstrates why government officials and business executives must join forces to win an exemption by all means.
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