President Donald Trump secured his first revamp of a U.S. trade deal, after reaching an agreement this week with South Korea that would allow American automakers greater access to that country’s markets, senior administration officials said on Tuesday night.
The agreement came as the U.S. has been involved in renegotiating the North American Free Trade Agreement with Canada and Mexico and has imposed tariffs that have roiled financial markets.
Seoul has agreed to double to 50,000 the number of cars each U.S. automaker can sell in the Asian nation without meeting local safety standards, said the officials, who briefed reporters on condition of anonymity. However, it’s not clear how the higher cap will immediately benefit American manufacturers, given that sales by American automakers currently fall well short of the new limit.
Under the revamped deal, the U.S. will extend a 25-percent tariff on pickup-truck imports until 2041. The tariff was set to expire in 2021 under the existing trade agreement, which came into force in 2012.
Meanwhile, South Korea agreed to limit its steel exports to the U.S. to about 2.7 million tons of year, in exchange for relief from the 25-percent tariff Trump announced earlier this month. Many of the details of the revised trade deal and the steel quota were previously disclosed by South Korea.
The deal removes a major economic irritant as the allies prepare for high-stakes meetings on North Korea. Trump and South Korean President Moon Jae-In are planning separate meetings with North Korea’s Kim Jong Un in the coming weeks. Kim made a surprise visit to China this week and met with President Xi Jinping. China’s official news agency said on Thursday that Kim would be willing to give up his nuclear weapons and hold a summit with the U.S.
South Korea also agreed to eliminate non-tariff barriers such as certain environmental testing requirements and recognize U.S. standards on auto parts, according to the senior administration officials.