While yesterday we reported that President Trump had a change of heart about his plan to terminate NAFTA following a conversation with the leaders of Mexico and Canada, he came forth with strong words regarding the U.S.’s trade standing with South Korea.
The Washington Post reported that Trump called the five-year-old U.S.-Korea Free Trade Agreement “a horrible deal” that has left the U.S. “destroyed.”
If the U.S. were to follow through, this would be a large blow to the U.S.’s trade standing. After all, South Korea is the U.S.’s sixth-largest goods trading partner. According to the New York Times, the deal is responsible for $112.2 billion worth of commerce between the two countries. However, South Korea has a $27.7 billion trade surplus in goods, leading Trump to call the deal a “one-way street.”
Next week is the anniversary for the deal, colloquially called Korus, and triggers a review period to possibly renegotiate the agreement.
“We’ve told them that we’ll either terminate or negotiate,” Trump said, according to The Washington Post. “We may terminate.”
He added that the process of backing out of Korus is easier than it would be to scrap NAFTA
“With NAFTA, we terminate tomorrow; if we did, it ends in six months,” he said. “With the Korean deal, we terminate and it’s over. I will do that unless we make a fair deal. We’re getting destroyed in Korea.”
Conversely, South Korea’s Trade Ministry’s rebuttal was that it has no plans to renegotiate the agreement.
During his trip last week, Vice President Pence told an audience of business leaders in Seoul that the U.S. wanted to “reform” the agreement because U.S. businesses “face too many barriers to entry, which tilts the playing field against American workers and American growth.”
It’s also important to note that this comes shortly after the president’s decision to withdraw from the Trans-Pacific Partnership just a few days into his presidency.
