One reason for the downward trend in the U.S. bilateral trade deficit with Korea is that the U.S. is on track to set a record in goods exports this year.

South Korea continues to demonstrate its confidence in America by once again in 2016 increasing its holdings of $38.8 billion in investments at U.S.-based companies, nearly double the level the year prior to the implementation of the Korea-U.S. Free Trade Agreement (KORUS FTA) in 2011.

Rumors flooded Washington over the Labor Day holiday weekend that the U.S. would soon withdraw from the Korea-U.S. Free Trade Agreement (KORUS FTA). 

Last week, the House of Representatives and the Senate overwhelming passed and sent to President Trump’s desk a new sanctions bill for his expected signature.

Last March, President Donald Trump directed the Department of Commerce and the Office of the U.S. Trade Representative (USTR) to prepare an Omnibus Report on Significant Trade Deficits within 90 days.

If present trends continue, the U.S. may experience a lower bilateral merchandise trade deficit with Korea in 2017 than we have seen for the past several years – all without any action by USTR.