South Korea steel shares rise on USA steel tariff exemption

US getting very close to trade deal with S Korea: Trump

In a deal to revise their six-year-old free trade agreement (FTA), the United States has exempted South Korea from the heavy tariffs on steel imports.

The bilateral trade deal between the two countries is known as Korus.

Kim said South Korea also won an exemption from increased import tariffs on steel products.

Asian shares steadied yesterday, stemming last week's hefty losses after Mr Trump's action on steel and aluminium, and his plans to impose tariffs on up to US$60 billion (S$78.7 billion) in Chinese goods.

Korea's trade surplus with the USA was about $18bn a year ago, down from $23bn in 2016, according to the Korea International Trade Association.

South Korea's steelmakers rose on Monday, with market heavyweight Posco leading the overall sector after the United States agreed to exempt South Korea from its new steel tariffs.

In exchange for the exemption, South Korea will open its markets to USA -manufactured autos, expanding the number of cars it imports per manufacturer to 50,000, from 25,000.

U.S. domestic energy-tubular mills were hoping for a quota of 50% on imports from South Korea, a domestic mill source said.

The announcement came after Treasury Secretary Steven Mnuchin said US Trade Representative Robert Lighthizer reached "a very productive understanding".

Trump's hardcore support may be disappointed that he has already begun granting exemptions to his protectionist policies, but close ties between the US and South Korea are of particular importance at this moment in time.

Under the current FTA, the United States is required to remove a 25 percent import tariff on South Korean pickup trucks by 2021.

Seoul has agreed to double the import quota on American-made cars, as well as reduce the total amount of steel it exports to the USA annually by adhering to a quota of 2.68 million tons of steel (roughly 70 percent of its average for the past three years).

South Korea's trade minister Kim Hyon-chong speaks during a briefing at the Foreign Ministry in Seoul.

"We are going to proceed with our tariffs".

The concessions have come at a price, however, with the U.S. imposing new quotas on South Korean steel exports.

South Korea didn't agree to any additional opening of the agriculture market and also maintained its stance in other sensitive areas, the statement said.

Kim told Reuters no automakers previously exceeded the 25,000 vehicle threshold.

"South Korea will reduce the amount of steel that they send into the United States as a part of this".

American Metal Market's pricing assessment for U.S. import high-collapse seamless P110 casing stands at $1,275-1,300 per ton.

The two allies started discussing how to amend the free trade pact in August after Trump blamed it for causing the US trade deficit with South Korea.

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