U.S. President Donald Trump told Reuters on Thursday he will either renegotiate or terminate what he called a “horrible” free trade deal with South Korea and said Seoul should pay for a U.S. anti-missile system that he priced at $1 billion.
In an interview with Reuters, Trump called the five-year-old trade pact with South Korea “unacceptable” and said it would be targeted for renegotiation after his administration completes a revamp of the North American Free Trade Agreement (NAFTA) with Canada and Mexico.
He blamed the U.S.-Korean trade deal, known as KORUS, on his 2016 Democratic presidential election opponent, Hillary Clinton, who as secretary of state promoted the final version of the trade pact before its approval by Congress in 2011.
“It is unacceptable, it is a horrible deal made by Hillary,” the Republican Trump said. “It’s a horrible deal, and we are going to renegotiate that deal or terminate it.”
KORUS was initially negotiated by the Republican administration of President George W. Bush in 2007, but that version was scrapped and renegotiated by President Barack Obama’s Democratic administration three years later.
The U.S. goods trade deficit with South Korea has more than doubled since KORUS took effect in March 2012, from $13.2 billion in 2011 to $27.7 billion in 2016, according to U.S. Census Bureau data.
Trump said the Terminal High-Altitude Area Defense (THAAD) missile system now being deployed in South Korea to defend against a potential missile attack from North Korea would cost about $1 billion and questioned why the United States was paying for it.
“I informed South Korea it would be appropriate if they paid. It’s a billion dollar system,” Trump said. “It’s phenomenal, shoots missiles right out of the sky.”
Lockheed Martin Corp (LMT.N) is the prime contractor for the THAAD system.
Asked about the remarks, a former U.S. State Department official estimated the cost of the system at about $1.2 billion but said the United States would not want to sell THAAD to Seoul.
“We want to retain THAAD in our arsenal, consistent with all other U.S. weapons systems deployed on the Korean peninsula. We own them. We retain them. We have the right to redeploy them,” the official said, speaking on condition of anonymity.
(Reporting by David Lawder and Phil Stewart; Editing by Howard Goller)