US President Donald Trump imposed tariffs on some metal imports into the country in a bid to force the US' trading partners to renegotiate trade deals in exchange for exemptions from the trade protectionist measures.
Under the pact, Seoul will further open its auto market to U.S. manufacturers, while accepting a 20-year extension until 2041 to a 25 per cent United States tariff on Korean pick-up trucks.
Trade Minister Kim Hyun-chong, arriving back in South Korea from a meeting with counterparts in the U.S. Treasury, also said trade negotiators from the two countries agreed "in principle" on both issues.
South Korea was the sixth-largest trading partner to the USA in 2016, the USTR said. This is because no US automaker is now selling more than 50,000 cars a year in South Korea although the number of American vehicles made in the USA, complying with US vehicle safety standards and allowed to be exported to South Korea without safety inspection in South Korea has been doubled to 50,000 a year.
South Korea is not allowed to export steel products exceeding that quota to the United States, a ministry official told the news agency.
Trump has long called the 2012 KORUS agreement a "horrible" deal and a job killer, arguing it was lopsided on the grounds that the US' trade deficit had ballooned since it was signed.
The US will maintain tariffs on Korea's exports of pick-up trucks until 2041, from the previously agreed 2021, according to the ministry's statement.
Japan, along with China, was not granted a reprieve. Ford and General Motors each shipped fewer than 10,000 vehicles from the USA to South Korea past year.More news: Tucson Students Joining National March for Our Lives Saturday
The deal comes at a time of heightened tension on the Korean Peninsula, with the White House planning to move forward with talks with North Korea's leader, Kim Jong Un, and appears to end a dispute that had strained ties between Washington and a reliable Asian ally.
Seoul is the third-largest steel exporter to Washington.
A child holds USA and South Korean flags prior to the state arrival of South Korean President Lee Myung-bak at the White House in Washington, October 13, 2011.
The U.S. side agreed that annual exports of up to 2.7 million tons of South Korean steel products will be exempted from recently announced 25 percent tariffs. The current ceiling is 25,000 cars, but there's no USA company that sells more than 10,000 cars a year, Kim said.
"South Korea gave concessions in autos in return for steel tariff exemptions", he told Reuters.
The U.S. and South Korea seem to have finally resolved the trade disputes tearing at the alliance.
Trump's hardcore support may be disappointed that he has already begun granting exemptions to his protectionist policies, but close ties between the US and South Korea are of particular importance at this moment in time.
The resolution of these trade disputes, which have created tension in an important bilateral relationship at a crucial time in dealings with North Korea, allow the USA and South Korea to face North Korea from a more stable, unified position.