Perhaps as early as this week we should anticipate hearing about completion a significant trade agreement with South Korea. The deal is known as “KORUS” (KOR+U.S.), and has been in negotiations for over a year.
Part of the recent agreement within the auto-sector of the deal, between Moon Jae-in and President Donald Trump, via Lighthizer and Ross, is an exemption of U.S. steel tariffs for South Korea in exchange for a doubling of U.S. auto exports; from 25,000 to 50,000 American made cars, per U.S. automaker, per year. (link)
The results within KORUS exhibit the intended outcome of the global tariff proposal from President Trump as leverage to enhance the administration policy of reciprocity. The world is taking notice, and China is now beginning to signal their understanding of President Trump leading the international discussion of reciprocal trade.
The unspoken background is that all nations, who have acquiesced to the overwhelming demands of China’s trade position, are now beginning to reassess the value of President Trump confronting the equation head-on. Ultimately it is beginning to sink-in that all nations can benefit from correcting a trade imbalance within their own position. In essence, U.S. President Trump is moving the entire global trade dynamic.
The timing for a U.S. leveraged KORUS deal could not be better. On the geopolitical stage President Trump, through his sheer will, has thrown open the doors to a denuclearized Korean peninsular and is about to engage in direct discussions with North Korean leader Kim Jong-un.
The ramifications for peace on the Korean peninsular, and the economic outcomes therein, are seismic for South East Asia. Thus we see today stunning reports of Kim Jong-un heading to Beijing for discussions of unknown substance.
There is no doubt both Kim Jong-un (DPRK) and Chinese President/Chairman Xi Jinping must engage in talks about the ramifications. China has long used the DPRK as a proxy province for their own geopolitical strategy against the U.S. and western interests.
POTUS Trump using economic leverage to break down the walls of totalitarian regimes is a stunning position for two nations (China and DPRK) who must have thought such an action would be unconscionable a mere eighteen months ago.
Incredible times of jaw-dropping consequence. Because, ‘His Excellency’ Trump.
The Era of the Economic Titan is Back!
PS. A U.S./South Korea trade deal enhances the backdrop, and leverage, of U.S. position toward NAFTA. Canada and Mexico have aligned with the TPP multilateral trade deal. POTUS Trump is negotiating bi-lateral deals with nations within TPP (Japan, Australia, Vietnam, South Korea all ongoing).