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Exiting Korus may hurt US

The US may exit Korus, the free trade agreement it has with South Korea. Under Korus the US and South Korea had agreed to cut tariffs on roughly 95 per cent of the consumer and industrial products they trade. Apparently the United States is considering stopping all trade with any country doing business with North Korea. For the year ended June 2017, the US imported roughly $620 million in yarns and fabrics under Korus, which amounts to 28 per cent of total yarns and fabrics the US imported under free trade agreements in the period.

South Korea remains one of the top five sources of yarn and fabric imports, used for manufacturing operations in the US. Over the same period to June, apparel imports under Korus amounted to $186 million, roughly 1.4 per cent of total apparel imports under FTAs, more than two-thirds of which is synthetic apparel.

Though South Korea isn’t among the top sources of footwear for the US, imports of shoes from the country increased upward of 58 per cent between 2011 (before Korus was implemented) and 2016. South Korea also happens to be among the top sources of socks for the US, so that market could take a hit, too.