The report, titled "U.S.-South Korea FTA and Bilateral Trade Relations," states that while the U.S. trade deficit with Korea has fluctuated since the FTA's implementation in 2012, it has not been directly correlated with tariff reductions.
The findings come amid concerns of U.S. President-reelect Donald Trump's announcing additional tariffs on major trading partners in his next reign, while Korea's trade surplus with the United States continues to reach record levels.
"Many economists argue that tariff reductions under the FTA have not contributed significantly to the increase in the bilateral trade deficit," the report said, citing the automotive sector as a key example.
Despite initial concerns about the FTA's impact on the automotive industry, major U.S. automakers ultimately supported the agreement. The report highlights that automotive imports, particularly from Korea, saw the fastest growth before the 2.5 percent tariff reduction on vehicles took effect.
As Korea continues to strengthen its position in the global automotive market, with significant investments in electric vehicle and battery production in the U.S., the dynamics of the U.S.-Korea trade relationship are likely to be significantly affected under Trump.
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