SEOUL, May 2 (Korea Bizwire) – South Korea’s exports to the United States are expected to suffer losses as much as US$17 billion over five years if the two nations renegotiate a bilateral free trade deal, according to a report on Sunday.
South Korea’s businesses remain concerned after U.S. President Donald Trump told Reuters in an interview last week that he will either renegotiate or scrap the free trade deal with South Korea, calling it “horrible.”
If tariff rates are revised under renegotiation, South Korea’s auto, machine and steel sectors would be the hardest hit, according to the report by the Korea Economic Research Institute, a private think tank.
The report presumed that the U.S. may want to raise tariff rates to the level seen before 2012, when the trade deal went into effect.
If so, South Korea’s automakers will see their exports to the U.S. drop by as much as $10.1 billion over the next five years.
The nation’s machine and steel sectors will suffer a loss of $5.5 billion and $1.4 billion each in their exports to the U.S., the report said.
Trump has blamed the free trade deal with South Korea for causing a trade deficit of $28 billion last year between the two nations.
South Korean government officials said they were trying to figure out the background of Trump’s remarks about the free trade deal.
But, the U.S. has not yet requested South Korea to renegotiate the deal, officials said.