Seoul reassures Washington on trade deal after tariff threat

SEOUL — South Korea assured the United States it will implement a trade deal after Washington threatened to hike tariffs, the presidential office, or Blue House, said on Tuesday.

US President Donald Trump posted on social media on Monday that he would increase South Korean tariffs on autos, lumber, pharmaceuticals, and all other reciprocal tariffs from 15 percent to 25 percent, accusing the country's legislature of dragging its feet in enacting a trade agreement with the United States.

South Korea's presidential spokeswoman Kang Yu-jung said on Tuesday that Seoul is committed to implementing the deal made last October. The US president's comments sent the Blue House scrambling, holding a meeting in response.

The meeting was attended via phone by Minister of Trade, Industry and Resources Kim Jung-kwan who is currently in Canada as part of Seoul's special mission for strategic economic cooperation.

Kim will visit the United States to discuss tariffs with US Commerce Secretary Howard Lutnick, according to the presidential office.

Yonhap News Agency reported that under a joint fact sheet released after a South Korea-US summit held in Gyeongju last October, the United States agreed to lower tariffs on South Korean products, including automobiles, in exchange for South Korea investing $350 billion in the United States.

The two sides later signed a joint memorandum on Nov 14, stipulating that tariff cuts would be applied retroactively from the first day of the month in which relevant legislation was submitted to the South Korean parliament to implement the agreement.

South Korea's ruling Democratic Party submitted a special bill on US investment to the National Assembly on Nov 26, and the United States retroactively lowered tariffs on South Korean automobiles to 15 percent on Dec 4.

It was not immediately clear when the hike would take effect. A source familiar with internal discussions said the US president may have been prompted by recent South Korean regulatory actions against Coupang, a US-listed e-commerce company that has protested them as unfair and discriminatory.

Choi Seok-young, a former South Korean trade negotiator, said the tariff hike threat could be seen as "a political move in which the United States is exerting maximum pressure on South Korea in an effort to force concessions during the ongoing negotiations over nontariff barriers".

Xinhua - Agencies