U.S. Tariff Bomb on Korean Cars May Become a Reality
The American Chamber of Commerce (AMCHAM) in Korea said on April 29 that its delegation recently visited Washington, D.C. to ask the U.S. government to refrain from imposing up to 25 percent of tariff on cars from South Korea.
"I asked the U.S. government not to apply Clause 232 of the Trade Expansion Act to Korea," said Jeffrey Jones, chairman of the board of directors of AMCHAM Korea. “I hoped to hear that the U.S. government would not do that but only heard that it was considering the matter. In conclusion, President Donald Trump will decide on the matter. I also met with a White House official, but I have not heard any response yet."
AMCHAM Korea explained the outcome of the 2019 Doorknock visit to the United States to the media on April 29. AMCHAM Korea sends a delegation to the United States every year to share their experiences and understand U.S. economic trends. This year the delegation visited Washington, D.C. from April 8 to 11 and had 50 meetings with members of Congress and think tanks.
The delegation has delivered three messages –- Korea is a good partner of the United States that has continuously reduced Washington’s trade deficit; the revised Korea-U.S. FTA is a good agreement; and the United States should not apply Clause 232 of the Trade Expansion Act to Korea.
U.S. President Donald Trump has been pushing forward with the imposition of a tariff of up to 25 percent on imported cars by applying Clause 232 of the Trade Expansion Act. The U.S. Department of Commerce has been investigating whether imported cars threaten the U.S. economy and security since May of 2018 under President Trump's order.
Korea's car exports to the United States account for more than 30 percent of Korea’s total exports to the United States in a year. If customs duties are slapped on Korean cars, the Korean automobile industry will be placed at a crossroads of demise or survival. If a 25 percent tariff is imposed on Korean cars, they will lose their price competitiveness in the U.S. car market.
"During this visit, we emphasized that the United States' trade deficit with Korea dropped to US$17 billion in 2018 from US$22 billion in 2017,” said James Kim, chairman of AMCHAM Korea. “We asked U.S. government officials to exclude Korea from target countries of Article 232 of the Trade Expansion Act, stressing a decrease in the U.S. trade deficit with Korea."