The US is finally on its way to win its trade war with the rest of the world. Forbes Magazine reports “Koreans agreed to allow U.S. automakers to export 50,000 cars per year to Korea, up from 25,000.” Finally, victory! But wait there is more: “The Koreans also agreed to limit their annual steel exports to the U.S. to [a self administered quota of] 70% of their average over the last three years.” That’s the stuff that the news cycle loves, as Trump promised, the US “is gonna win so much you may even get tired of winning.”
Then there are the pesky details:
- The agreement with S. Korea to “allow 50,000 US car into its market is utterly meaningless, because U.S. automakers have never exported anything close to 25,000 cars to South Korea in any year. They exported 16,400 passenger vehicles there in 2016 and that included golf carts. In 2017, they exported 7,000 cars and golf carts.”
- The agreement on self administered steel tariffs is going to be expensive, since World Trade Organization rules expressly forbid voluntary export restraints (VERs)… Other countries will challenge the agreement at the WTO, which will then result in compensation that has to be paid.
- And all this is to reduce the bilateral US – S. Korea Trade deficit, although focusing on bilateral trade deficits is futile.