The government also said Washington will exempt Seoul from its steel tariffs and maintain the 10 per cent tariffs on imports of South Korean aluminium.
Based on the revised agreement, South Korea will be able to trade with the US a quota equivalent to 70 per cent of South Korea's average exports to the US from 2015-2017 without the 25 per cent tariffs that President Donald Trump imposed on steel imports to his country, the US government announced on Tuesday, Efe news reported.
This will result in a 30 per cent reduction of steel shipments from South Korea to the US, according to a senior US official who spoke on condition of anonymity.
However, Washington has not reached any agreement with Seoul on the tariff exemption of aluminium, hence the 10 per cent tax will still be imposed, he added.
Last week, the Trump administration announced that it would temporarily exempt South Korea, the European Union (EU), Australia, Argentina and Brazil, as well as its NAFTA partners, Canada and Mexico, from tariffs on steel and aluminium.
The announcement on the terms to be applied with South Korea is revealing for the other countries on the US temporary tariff exemption list because the Trump administration confirmed that in future negotiations on tariffs it is planning to apply a quota to these nations in order to reduce the exports of those metals to the US.
A second senior US official said in a conference call with journalists that what this agreement makes clear is that any tariff relief in the negotiations with the US will necessarily come with a strict quota.
On the other hand, the US and South Korea are close to concluding their renegotiation of their bilateral trade agreement, which entered into force in 2012 and which Trump had criticised harshly for the deficit that Washington has accumulated.
The modifications included in the agreement are limited and fundamentally affect the automobile sector, although the US government has described them as historic.
"When this is finalised, it will be the first successful renegotiation of a trade agreement in US history," a third US official said.
Among the revisions is the extension of the 25 per cent tariff that Washington imposes on South Korean trucks until 2041, which was due to expire in 2021 under the current trade deal; in addition to the expansion from 25,000 to 50,000 vehicles from each manufacturer that the US can export each year, under its own standards, to South Korea.
South Korea has also agreed to include US pharmaceutical companies this year in its special pricing program for innovative drugs, and a bilateral currency agreement is expected to be finalized soon, officials said.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
