US agrees to exempt S.Korea from steel tariffs, but imposes import quota - S.Korea (updated)

KG DongbuSteel

26/03/2018 03:43

* US imposes steel import quota of 70 pct of 3-yr average
    * South Korea is 3rd largest steel exporter to US
    * S.Korean steelmaking firms rally on deal hopes

    By Joyce Lee and Hyunjoo Jin
    SEOUL, March 26 (Reuters) - The United States has agreed to
exempt South Korea from steel tariffs, South Korea's trade
ministry said on Monday, instead imposing a quota on steel
imports as the two countries renegotiate a trade deal sharply
criticised by U.S. President Donald Trump. 
    South Korea had meanwhile agreed to give ground on
automobile trade regulations by agreeing to changes in the
bilateral free trade deal known as KORUS, the ministry said. 
    In April, Trump told Reuters he would either renegotiate or
terminate what he called a “horrible” trade deal that has
doubled the U.S. goods trade deficit with South Korea since
2012.
    The agreement means South Korea becomes the first U.S. ally
to receive an indefinite exemption, albeit with quota, on steel
tariffs imposed by Trump, a move that had fuelled concerns of a
damaging global trade war.  urn:newsml:reuters.com:*:nL4N1QQ1M8 
    Last week, Trump temporarily excluded six trade partners,
including Canada and Mexico, Australia and the European Union 
from higher U.S. import duties on steel and aluminium which came
into effect on Friday. 
    The import duties, of 25 percent on steel and 10 percent on
aluminium, were mainly aimed at curbing imports from China. 
    South Korea has received a quota of about 2.68 million
tonnes of steel exports, or 70 percent of the annual average
Korean steel exports to the United States between 2015-2017,
which will be exempt from the new tariffs, the ministry said in
a statement. 
    South Korea is the third-largest steel exporter to the
United States and the world's top importer of Chinese steel,
leading to concerns it was a conduit for China's excess
capacity. 
    Shares in South Korean steelmakers rose sharply on Monday,
with Dongbu Steel  016380.KS  leading gains, on expectations of
tariff exemptions.  urn:newsml:reuters.com:*:nL3N1R805H
    South Korea's steel association said in a statement it was a
"relief" that South Korea has been excluded from U.S. steel
tariffs, but it was regrettable it was unable to secure more
quotas for steel exports. 
    South Korea’s steel industry will "try to pave the way to
ease U.S. restrictions on steel exports," the association said
in a statement.
    South Korea and the United States also agreed that U.S.
tariffs on Korean pickup trucks will be in place until 2041,
extended by 20 years from the previous phase-out schedule of
2021.  urn:newsml:reuters.com:*:nL1N1P01T8
    Under the revisions, U.S. automakers will be able to bring
into South Korea each year 50,000 vehicles per automaker that
meet U.S. safety standards, not necessarily Korean standards, up
from 25,000 vehicles previously. 
    South Korea also said it will "take into account U.S.
standards and global trends" when Seoul decides its fuel economy
and emissions rules from 2021 to 2015.

 (Reporting by Joyce Lee and Hyunjoo Jin
Editing by Lincoln Feast)
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net))