President Donald Trump scored big this week on trade when his tariffs on steel and aluminum induced South Korea — the world’s sixth leading producer of steel among the nations of the world — agreed to double its imports of U.S. cars and would cut the amount of steel it sold to the U.S. by 30 percent in return for exemption from the sanctions.
The U.S. ran a trade deficit with South Korea last year of $17 billion.
The deal will let the U.S. sell 50,000 cars in South Korea, cornering about 5 percent more of global car exports.
South Korea produces almost twice as much steel as Germany, the seventh ranking country in steel production.
Since 2007 (pre-recession), U.S. production of steel has dropped by about a quarter, from 8.5 million tons annually in 2007 to 6.5 million in 2017.
By contrast, South Korea’s production over the same period has risen from 52 million tons a year to the current level of 71 million.
Trump’s solid trade victory is likely to stimulate other countries to conclude new trade deals with the U.S. since they will not want their steel or aluminum exports to be subject to a steep tariff while South Korea’s get in tariff-free.
The whole point of the Trump strategy on trade and tariffs is to replace global regulation by the World Trade Organization — a U.N.-like organization that enforces trade laws.
By imposing sanctions and seeking agreements to mitigate them in return for tangible concessions to American workers and business, Trump is truly putting America first.
The evidence of South Korea’s new trade policy is and eloquent testament to his success.
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