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(LEAD) Seoul working on various scenarios related to U.S. auto tariffs

Industry 17:17 May 17, 2019

(ATTN: UPDATES with data on S. Korea's car exports to U.S.)

SEJONG, May 17 (Yonhap) -- South Korea said Friday that it is working on various scenarios to cope with U.S. President Donald Trump's imminent decision on auto tariffs.

South Korea will prepare countermeasures for various possible scenarios on the U.S. decision, the Ministry of Economy and Finance said, without elaborating.

Seoul has repeatedly asked the United States to exempt South Korean cars from higher tariffs, saying South Korea, a close ally of the U.S., does not pose a threat to U.S. security.

Trump is set to decide by May 18 whether to delay or impose tariffs on foreign autos on national security grounds based on Section 232 of the Trade Expansion Act.

South Korea made concessions on automobiles in the revised bilateral free trade agreement that went into effect in January, though concerns persist about possible U.S. tariffs on South Korean vehicles.

Wendy Cutler, a former U.S. official who negotiated the original free trade deal with South Korea in 2007, has said that it is inconceivable that Trump will rule against South Korea, as Seoul has made concessions in the free trade pact and is a strong ally of Washington.

South Korea is concerned that it could suffer a considerable setback if the U.S. imposes tariffs on South Korean autos, as the auto industry accounts for 14 percent of production and 12 percent of employment in the country's manufacturing sector.

South Korea said it will push to diversify the overseas markets for its cars in the mid-to-long term.

South Korea shipped 811,123 cars to the U.S. in 2018, accounting for 33 percent of South Korea's total overseas exports of 2.44 million cars, according to South Korean government data.


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