U.S. Congress "Not because of Korea's trade deficit cuts in tariffs"

Photo Source: Yonhap News

Amid concerns that U.S. President-elect Donald Trump will also impose additional tariffs on South Korea, a survey found in the U.S. that "tariff reduction under the South Korea-U.S. free trade agreement and FTA is not the direct cause of the U.S. trade deficit with South Korea."

The U.S. Congressional Research Service said in a report released on the 28th local time, "The U.S. trade deficit with South Korea is changing. Many economists believe that tariff reduction under the FTA did not contribute significantly to the increase in the U.S. deficit in bilateral trade."The

report cited the automobile industry, which rather grew Korean imports quickly before the tariff cut, and explained that economists view macroeconomic factors such as national savings and investment rates more than tariff cuts.

However, the report left open the possibility, saying, "Some analyses claim that the Korea-US FTA contributes to the U.S. trade deficit."

South Korea's trade surplus with the U.S. is the largest ever, and some are concerned that Trump could take economic action against South Korea for this reason.