President Donald Trump secured his first trade deal with South Korea in the wake of his controversial steel and aluminum tariffs, an agreement touted by Commerce Secretary Wilbur Ross as proof that a trade war could be avoided.
The U.S. and Seoul revised a previous trade pact to grant American automakers improved market access and to limit Korean steel exports to the U.S. In return, South Korea will receive exemptions from the hefty tariffs -- 25% on steel and 10% on aluminum -- that Trump announced in mid-February. Trump has argued that tariffs would protect U.S. companies and allow for the creation of new manufacturing plants, one of his main promises during the 2016 presidential campaign.
“The real key is it’s a peaceful deal, it’s a negotiated deal, it works for both sides,” Ross told FOX Business’ Maria Bartiromo during an interview on Tuesday. “It accomplishes our purpose about reducing the steel and aluminum exports to us, 30% is a big reduction. And it’s about what we would have accomplished with the tariffs, had the tariffs instead gone on.”
The deal could also serve as a template for other countries affected by the tariffs. Currently, the U.S. is negotiating with the European Union in hopes of striking a new trade agreement, Ross said, although he noted that the situation of every country is a “little bit different.” But, despite the constructive dialogue, the U.S. still has a long way to go before it reaches an agreement with the EU, he said.
Critics have also warned that tariffs will raise the cost of steel and aluminum, making products such as automobiles and canned beer more expensive. But Ross, a proponent of the import tax, argued the tariffs are necessary to protect U.S. jobs and national security, adding that costs would only increase marginally.
“I think the real template is, we’re ending up with reasonable negotiated deals, not warfare,” he said. “We’re prepared to go and do an extreme action as needed, but hopefully people will be logical and negotiated deals.”