The Next Trade War: Trump Threatens To Terminate "Horrible" Trade Deal With South Korea

Tyler Durden's picture

Two days after launching a trade war with Canada by imposing tariffs on lumber imports, one day after nearly terminating NAFTA (but stopping just shy after an alleged phone call from the leaders of Mexico and Canada), Trump has finally turned his attention to the one nation whose GDP consists of roughly 60% net trade, and which we said several months ago, is far more likely to be punished for trade malpractice than China: South Korea.

Speaking to Reuters and WaPo, Trump - who earlier also told Reuters that a "major, major" conflict with North Korea is possible - Trump sharply criticized the U.S.-Korea Free Trade Agreement, known as Korus, the latest version of which was ratified in 2011 and said that he will "renegotiate or terminate" the "horrible" free trade deal. Next week marks an anniversary for Korus and triggers a review period to potentially renegotiate or ratify a new version of the agreement.

“It’s a horrible deal. It was a Hillary Clinton disaster, a deal that should’ve never been made,” Trump said. “It’s a one-way street.”

“We’ve told them that we’ll either terminate or negotiate,” Trump said. “We may terminate.”

Trump added: “I will do that unless we make a fair deal. We’re getting destroyed in Korea.”

On his trip to Asia last week, Vice President Pence said to an audience of business leaders in Seoul that the United States was looking to “reform” the Korus agreement because U.S. businesses “face too many barriers to entry, which tilts the playing field against American workers and American growth.”

The president explained that the process of termination of Korus is simpler than with the North American Free Trade Agreement. “With NAFTA, we terminate tomorrow; if we did, it ends in six months. With the Korean deal, we terminate and it’s over.”

* * *

Trump also said he wants South Korea to pay for the recent $1 billion deployment of the U.S. Terminal High Altitude Area Defense, or THAAD battery, a missile defense system deployed to South Korea to protect against accidental North Korean launches, and to antagonize China.

Hyundai Motor shares fell as much as 2.4% after Trump's comments, while the South Korea's won also dropped on the comments. South Korea's automakers association said it was concerned about the possible revision of the country's trade deal with the United States, an official of the industry group said on Friday. 

"We are worried about the uncertainty of the deal," Kim Tae-nyen, vice president at the Korea Automobile Manufacturers Association (KAMA), told Reuters by telephone.

As Reuters followed up, a senior South Korean finance ministry official said the country has not yet received official requests on renegotiation of its free trade pact with the United States.

"Talk and actual policy are different," the official told Reuters. "They have not requested anything from us so we'll have to wait and see."

Trump's aggressive trade stance was unveiled as tensions are rising on the Korean Peninsula and as South Korea's increasingly more irrational neighbor is proving to be a major source of instability, and thus leverage for any future Trump negotiations.

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lolmao500's picture

Is it me or Trump is really a dumbass?

- South Korea is a powerhouse, we need them ON OUR SIDE... if you fuck with them and insult them, they will say FUCK YOU and side with China.

- If we need to take out North Korea, WE NEED SOUTH KOREA to fight with us...

- The next skorean government taking over in 2 weeks will be somewhat pro-north korea. You dont want to piss them off... they will kick US forces out and then where will you be when you need a staging ground to take out NKorea?

WTF Trump, SHUT THE HELL UP, STOP BASHING OUR ALLIES FOR FUCK SAKE

Shemp 4 Victory's picture

 

STOP BASHING OUR ALLIES FOR FUCK SAKE

America has no allies.

We’re getting destroyed in Korea

...so we're going to poke NK until they reduce Seoul to rubble.

espirit's picture

Some insiders (cough,cough), privy to the next Ally bashing, are making mint on the FX trade.

Jus' bidness.

Pandelis's picture

this is Trump. pay to play.

artichoke's picture

But the payment goes to the US government or US companies, not into his pocket.  The goal and effect have nothing to do with the Trump Organization.

 

I do hope you see the difference.

NoDecaf's picture

Trump making friends and keeping promises everywhere he goes.

Would you like some chocolate cake?

Perimetr's picture

"We’re getting destroyed in Korea."

No, that comes after we launch the attack . . . .

Troll Magnet's picture

Our bug companies like Nike, Apple, MSFT et al are all doing just fine everywhere including Korea. This is about wanting to sell our old antiquated weapons to SK. Nothing more or less. Trump is captured by the MIC.

CuttingEdge's picture

What are the odds Germany is Trump's next check box on his trade war list?

beemasters's picture

The worst deal ever would be...

Israel to get $38 billion in U.S. military aid over 10 years
http://www.politico.com/story/2016/09/israel-us-military-assistance-228110

Oh regional Indian's picture

What do you think the Volkswagon emissions scandal was all about?

NiggaPleeze's picture

You missed the point.  Insiders (such as Jared) know in advance which country will be targetted next and can have their pals in offshore accounts place sure derivative bets against the relevant currency.  And that hard-earned profit ain't going to the US government, not even a piece of it in taxes.

Troll Magnet's picture

You sayin' them hook nose dual citizens be lyin, manipulatin and cheatin their way to prosperity? NIGGA PLEEEZE!

38BWD22's picture

 

 

Picking on "Big Bad South Korea" is mistake.  They have an admirably advanced economy (free WiFi all over Seoul, inside and outside).  Some of their companies are world leaders in technology.

They make decent cars at a good price, NO ONE in N. America would be able to match their low cost of production.

Their bearing plants are extremely modern and make great quality product, but that has NOTHING to do with my comment.

:)

DEMIZEN's picture

without a premiun access to giant cash loaded markets SK would be just another developing country.

Stuck on Zero's picture

All Trump has to do is make tit-for-tat trading rules with SK. Immediately they would not be able to sell anything they manufactured into U.S. markets.

artichoke's picture

Nice to hear they have it so good.  They can afford to pay us more.

Colonel Klink's picture

Nothing.  Too bad DCRB isn't around, he could talk bearings with you. ;)

GUS100CORRINA's picture

MAYBE IT IS TIME FOR AMERICA TO LEAVE AND LET THE ASIANS WORK OUT THEIR ISSUES!!!

CHINA ... ARE YOU LISTENING?? RUSSIA ... ARE YOU LISTENING?

AS AN AMERICAN, THIS COUNTRY HAS A BETTER USE FOR ITS MONEY AND TIME.

MY SOLUTION: DROP 1,000,000 BIBLES FROM THE AIR ONTO THE ENTIRE NORTH KOREAN  LANDSCAPE WITH MESSAGE: READ THIS BOOK FOR YOUR SURVIVAL.

ShamanX's picture

If they're so great why do they need such a lopsided trade deal?

Colonel Klink's picture

That's a nice 38BWD22 truck wheel bearing you have there.  It'd be a shame if something happened to it.  Hahahaha

keep the bastards honest's picture

so did libya. oil profits were used to give the people huge support, went from mostly illiterate for example to mostly literate under gaddafi plus all the free apts on marriage, car, support if unemployed after graduation at same rate as employed peers.. etc

yogibear's picture

Tell South Korea if they don't start coughing up more dough they'll be on their own.

Fake Trump's picture

Let's see when he will bash China and Japan. It won't be long. 

Mustafa Kemal's picture

 

 

Trump wants SK to pay for THAAD

"“It’s phenomenal, shoots missiles right out of the sky,"

https://www.rt.com/usa/386408-trump-us-protection-costs/

So SAAD

FireBrander's picture

"South Korea is a powerhouse"

Yeah right...you (Korea) can sell everything you manufacter to American Consumers...but we can't sell anything in Korea without crippling import taxes.

Let's reverse that trade "deal" and see who's a "power house" in 10 years...

WTFUD's picture

What like in 10 years when the debt's $50 Trill?

Fake Trump's picture

Forget about 10 years. Let's see the next 4 years under the flip flop president. I don't want to speculate but I can say the shit will hit the fan. Keep printing.

Musum's picture

You believe our trade deficit pivots on taxes? It's our own economy that increasingly tilts towards "finance" and "financialization". We could be the one with import taxes and in 50 years, they'd still be eating our lunch.

Lets Buy The Dip's picture

They keep saying missles will fly only 2 days later, it all dies down. WAR games and a penis showing game, is getting a bit old. No one is doing anything. 

This might sound crazy==>  CLICK HERE the threat of WAR and WAR is actually good for the stock market. :-0

Maybe trump and his investments are locked away and they will not crash the market, cause of higher powers

artichoke's picture

It's you.

SK is a powerhouse as a US base, and they have some big manufacturing companies without much particular technology.  It's a fine place, I have friends there.  But we don't have to be humble to them!

Musum's picture

Humble to them? Holy shit. We divide their country. Use them as a military outpost in NE Asia. We keep their country divided for nearly a century. And you think we're being humble to them??

Hyjinx's picture

Exactly how the fuck is the US preventing Korea reunification? China divides Korea dumbass by propping up Kim.

Déjà view's picture

Who props up China..."dumba$$' U.S. consumer who insists on cheap Chicon $hit...

Musum's picture

A US foreign policy that isolates and threatens NK. Without normalization of relations, the status quo continues.

jcaz's picture

Wow, Musum.   That's the dumbest comment in a series of dumb comments here- congrats.

 

Musum's picture

Everything I stated is factual.

Badsamm's picture

The South can't afford to feed the North for the next 50 years as they learn to use a phone. The US can't afford a stronger S Korea because they already make better phones. It makes perfect sense we would instigate a war between the two- our military threat can fight our economic threat and all we lose is 38,000 idiots dressed like soldiers.

Nexus789's picture

The US empire only has vassal states that are lead by CIA compromised gutless wonders.

aliens is here's picture

Good, since they are a powerhouse they won't need us to defend them. Let them defend their own land.

Anteater's picture

The power of Tim Cook compels it! Apple has parked $Ts offshore. You don't think the Kushner-Xi $4B hotel deal and Apple doesn't affect Trump's South Korea policy? Money, money, money! Samsung Galaxy 8 is eating Apple's forward profits. They have a new battery supplier and won't be tricked by China again. South Korea cars and heavy equipment are superior to USA, still made in parts in plants all over the 3W, then final-assembled as best they fit, in right-to-work States by oxy-head labor.

takeaction's picture

Pay us for defending you...this "IS" what he preached on the campaign trail...Right?

Wild Theories's picture

"we don't protect you for free"

 

beemasters's picture

What happened to NATO? Nothing.

keep the bastards honest's picture

SK and NK want to re-join. SK got rid of their US supporting PM. NK ha soffered a numbe rof times to sign an on aggression pact with US but it  says NO to everything. Pay for defence? sounds like protection racket.

lolmao500's picture

Meanwhile, Trump never bashed Putin or Russia the way he bashed any of our allies. Trump is a goddamn retard owned by the Kremlin