Trump Pledges To Withdraw From U.S.-South Korea Trade Agreement
ROBERT SIEGEL, HOST:
President Trump has said that he wants the country to begin withdrawing from the 5-year-old Korean-U.S. free trade agreement. Tonight Reuters is reporting that a senior administration official says the White House is going to back away from that position for now. But the deal with South Korea will continue to be a sore point because the trade gap has only widened since it took effect. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: President Trump won office by telling voters the global trade system is rigged against the United States, and he says the 5-year-old South Korea trade pact is part of the problem. Here he was at the White House in June.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT DONALD TRUMP: The fact is that the United States has trade deficits with many, many countries, and we cannot allow that to continue. And we'll start with South Korea right now.
ZARROLI: South Korea sells many billions of dollars' worth of products to the United States - chemicals, cars, dishwashers, smartphones. Companies such as Samsung, Hyundai and Daewoo have become familiar brands to Americans. They have long-sold many more products to the United States than U.S. companies sell in Korea, and that has sometimes led to frictions between the two countries. The trade pact was supposed to change that by prying open Korean markets to American exports. But that hasn't happened, says Rob Scott of the Economic Policy Institute.
ROB SCOTT: We were supposed to benefit from the deal. It didn't work out that way (laughter). At the end of the day, U.S. exports to Korea have fallen since the agreement took effect.
ZARROLI: Scott says since 2012, the U.S. trade deficit with South Korea - the difference between what Americans buy from the country and what they sell there - has more than doubled to $28.3 billion in 2015. And Scott estimates that this trade deficit has cost the U.S. some 90,000 jobs. Why this has happened is due in part to Americans love of spending, says economist Sung Won Sohn of California State University.
SUNG WON SOHN: The main reason for America's trade deficit, whether it's in Mexico or Korea, is America's insatiable appetite for imports.
ZARROLI: Sohn says the American economy has been fairly strong in recent years, and people have been gobbling up products such as cars and electronics, the very products that South Korea sells a lot of. In contrast, South Korea's economy has been lackluster, so Koreans are buying less. That's not to say some American industries haven't benefited from the Korean trade pact. Ron Moore sells some 2,000 acres of soybeans and corn in Illinois, and he has seen firsthand the benefits of the U.S. trade agreement with South Korea.
RON MOORE: Four years ago, they didn't import any soybean oil from the United States, and now it's up to 180,000 metric tons of soybean oil. So it's a huge increase in the opportunities for soybean farmers.
ZARROLI: And he says canceling the trade agreement would send farm prices falling. That's unlikely to happen anytime soon. Published reports tonight say the White House has decided not to push to scrap the treaty right now. One problem for the White House is that tensions with North Korea are increasing again, and that makes this a bad time to be playing hardball with South Korea over trade. Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.