(LEAD) U.S. unlikely to slap tariffs on S. Korean cars: Ex-Moody's official
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(LEAD) U.S. unlikely to slap tariffs on S. Korean cars: Ex-Moody's official

2018/08/10 15:24

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(ATTN: RECASTS throughout with comments by Korea Society president; CHANGES headline; ADDS byline)

By Kim Kwang-tae

SEOUL, Aug. 10 (Yonhap) -- The United States is unlikely to impose tariffs on South Korean cars, a former Moody's official said Friday, a possible exemption that could give a boost to the revised free trade agreement between the two allies.

South Korea has made concessions on automobiles in the revised free trade deal struck earlier this year, but U.S. President Donald Trump has threatened to slap the so-called Section 232 tariffs on automobiles on national security grounds.

Thomas Byrne, president of the New York-based Korea Society, said he hopes that the Trump administration will not invoke the 232 tariffs on Korean automobiles, citing the opinion of Wendy Cutler, who negotiated the original free trade deal with South Korea in 2007.

Cutler has said that it is inconceivable that Trump will rule against South Korea as Seoul has made concessions in the free trade deal and is a strong ally of Washington.

"She believes that the U.S. is taking everything into consideration and would not invoke the 232 tariffs on Korean automobile makers, and I hope that she is right on that ... and I'd go with her judgment," Byrne said in a seminar at the Federation of Korean Industries, a business lobby, in western Seoul.

The U.S. has conducted 16 investigations into mostly oil imports under Section 232 of the Trade Expansion Act since 1962, though most of the probes determined that the imports posed little threat.

South Korea -- the third largest source of U.S. steel imports -- was the first and only country to secure a permanent steel tariff exemption, although it had to accept a quota on how much products it could ship.

The EU, Canada, Mexico, Australia, Argentina and Brazil are exempt from 2018 aluminum tariffs.

The U.S. Congress has delegated to the president the power to make determinations and impose tariffs, but there is a lot of dissatisfaction on Capitol Hill with how the Trump administration is imposing tariffs, particularly those against its allies.

There is an effort in Congress supported by the defense department to take section 232 determination out of the hands of the commerce department and to allow the defense department to make decisions.

The U.S. secretary of defense has sent a letter to the secretary of commerce, and he expressed concerns about the negative impact on key allies such as South Korea as the Trump administration seeks to implement the section 232 tariffs.

In July, a bipartisan South Korean parliamentary delegation visited Washington and said the ratification of the revised free trade deal could get nowhere in Seoul unless the issue of 232 tariffs on Korean automobiles is resolved.

"If the U.S. goes ahead (with Section 232), it will damage the bilateral trade relationship" and "the overall relationship, the security relationship perhaps as well," Byrne said.

The former senior vice president at Moody's Investor Services said it would be good if Trump made a 180 degree turn on Section 232 in consideration of South Korean automobiles.

"To wage a successful war, you need popular support. President Trump's tariff policy backfired, and you start to see widespread job losses in companies that import from China and maybe some other countries, and find out that we lose workers," Byrne said. "Trump would be in a political situation that if he wanted to be reelected in 2020, he would probably have to rethink his policies."

  

Korea Society President Tom Byrne (Yonhap) Korea Society President Tom Byrne (Yonhap)

entropy@yna.co.kr.

kyongae.choi@yna.co.kr

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