Trump, South Korean leader agree on nukes, spar on trade
American says he wants to redo 2012 trade agreement.
President Donald Trump and South Korea’s new leader showed joint resolve on North Korea on Friday despite their divergent philosophies for addressing the nuclear threat, yet the U.S. opened up a new front of discord by demanding a renegotiation of a landmark 2012 trade pact between the two countries.
Concluding two days of meetings at the White House, Trump and President Moon Jae-in each delivered tough talk about North Korea’s development of atomic weapons. The “reckless and brutal regime” requires a determined reply, Trump said. And Moon, who has long advocated outreach to Pyongyang, vowed a “stern response” to provocation, promising to coordinate closely with Trump as he looks to intensify economic and diplomatic pressure on North Korea.
They showed little harmony, however, on trade.
Summoning the economic nationalism that has marked much of his international agenda, Trump highlighted America’s trade imbalance with South Korea. Two-way trade in goods and services was $144 billion last year, with the U.S. running a $17 billion deficit.
“The fact is that the United States has trade deficits with many, many countries, and we cannot allow that to continue,” Trump said. “And we’ll start with South Korea right now.”
Ahead of the two presidents’ first face-to-face discussions, South Korean companies announced plans to invest $12.8 billion in the U.S. over the next five years. Nevertheless, Trump wasn’t placated. He said the two sides would renegotiate the 2012 free trade agreement and called it a “rough deal” for America, echoing the sentiments he has voiced about the North American Free Trade Agreement with Canada and Mexico.
The White House later confirmed Trump has asked his trade representative to begin the process of renegotiation.
Trump accused Seoul of helping steel reach the U.S. at unfairly low prices. It was apparently a reference to Chinese steel. Trump also demanded that market barriers to U.S. automakers be lifted to give them “a fair shake at dealing with South Korea.”
To rub it in, Trump called on his top economic officials to relay their grievances to Moon in front of journalists.
Commerce Secretary Wilbur Ross said the trade imbalance had grown sharply since the trade deal took effect due to unfair “rulemaking” governing U.S. industrial products entering South Korea, particularly autos.
It all amounted to an unusual display of one-upmanship in a meeting between close allies. After the talks, Moon largely skirted the differences on trade, calling the U.S.-South Korean economic partnership an “essential pillar” of the alliance. Such language is traditionally reserved for their joint effort in the 195053 Korean War and the ongoing presence of 28,000 U.S. forces in South Korea.
After the flood of accusations of South Korean wrongdoing, Moon said through an interpreter: “Economic growth and job creation will be promoted to ensure our peoples enjoy greater mutual benefits.”
South Korea is America’s seventh-largest market for exported goods such as electrical machinery, aircraft, medical instruments and beef. It is also the sixth-largest supplier of U.S. imported goods, benefiting Korean makers of cars, phones and pharmaceuticals.
Since the deal went into effect, exports of American goods to South Korea have slipped 2.8 percent, according to the Office of the U.S. Trade Representative. At the same time, South Korean goods exports to the U.S. have boomed by 23.4 percent. U.S. services providers have fared better, with their exports climbing 29.3 percent in the last five years.
Earlier this week, Myron Brilliant, vice president of the U.S. Chamber of Commerce, warned that reopening the agreement “could lead to its unraveling,” benefiting only U.S. trade competitors.