A revised free trade agreement between South Korea and the US is reportedly in jeopardy after President Donald Trump threatened to impose heavy tariffs on auto and auto parts imports.
Toyota supplier Denso expects $700m hit if levies are implemented.
Angela Merkel badly wants a trade deal to prevent Trump from carrying out his threat to put 25% tariffs on car imports into the US.
US President Donald Trump said that European leaders were coming to Washington next week to try to hammer out a deal focused largely on car tariffs.
The Mercosur bloc of four South American nations has offered to cut import tariffs on European Union cars by 50 percent .
The Korea Institute for Industrial Economics & Trade (KIET) said in its report that the KORUS FTA is rapidly losing its positive effects in terms of South Korea’s car exports to the United States.
Some industry observers saw this latest move as a US tactic to pressure Mexico and Canada to move quickly to agree to an overhaul of the North American Free Trade Agreement.
Trump administration demands in NAFTA trade negotiations meant to push auto jobs back to the United States may not be enough to spark a shift in where automakers build cars and trucks.
Mexico is opening the door to compromise on the key Nafta issue of auto manufacturing, though it’s unclear if the flexibility is enough to reach a deal with the US and Canada.
The latest US proposal for increasing NAFTA’s regional automotive content would carry a four-year phase-in to meet a higher, 75 percent regional value threshold and new labor content rules requiring substantial work at wages of $16 an hour or higher.
The European Union and Latin American bloc Mercosur have made some progress on how to open their markets to cars, but ended free trade talks in Brussels with finger-pointing about who was holding up a deal.
Negotiators trying to hammer out a quick NAFTA deal said they will take a break until May 7, allowing time for consultations with the auto industry in Mexico.
Canadian, Mexican and U.S. ministers seeking to revamp the North American Free Trade Agreement (NAFTA) have made good progress on the key question of autos, Canadian Foreign Minister said.
After Korea and the United States agreed “in principle” to revise the free trade agreement between the two countries, negotiators from Korea received a great deal of praise for managing to land a deal without giving up too much.
The US proposal would distinguish between different NAFTA car parts by grouping them into five categories, some of which would have a lower requirement for North American content or none at all
Japan will have little choice but to enter into a bilateral trade deal with the United States similar to one President Donald Trump clinched with South Korea, a former top Japanese currency diplomat said.
Mexican workers’ wages are at the heart of a major proposal from the United States aimed at breaking through an impasse on automobiles and securing a new North American Free Trade Agreement.
South Korean carmakers on Monday called on the government to create a level playing field by easing regulations for them as well after the current trade pact between Seoul and Washington was tentatively revised in favor of US carmakers.
South Korea has agreed to further open its auto market to the United States as the two countries prepare to amend their six-year-old trade agreement.
The US government has dropped a demand that all vehicles made in Canada and Mexico for export to the United States contain at least 50 percent US content.