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<p>Donald Trump argued that the Korea–U.S. Free Trade Agreement (KORUS FTA) was a “horrible deal,” pointing to a substantial increase in the U.S. trade deficit with Korea following the agreement’s implementation in March 2012. Notably, during the same period, the U.S. trade balance with numerous other major trading partners, none of which maintained an FTA with the United States, also deteriorated, raising doubts as to whether the KORUS FTA was the primary cause of the observed imbalance. This study evaluates the causal effect of the KORUS FTA on the U.S.–Korea trade balance using a difference-in-differences framework, complemented by event-study and synthetic control analyses as robustness checks. The empirical findings, after accounting for business cycle fluctuations, provide overall support for Trump’s assertion.</p>

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Was the KORUS FTA a Horrible Deal?

  • 期刊论文

  • 出版模式：

    开放获取

  • 发表日期：

    2025年11月28日

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  • Hyeongwoo Kim,
  • Madeline H. Kim,
  • Divya Sadana,
  • Peng Shao,
  • Jie Zhang

摘要

Donald Trump argued that the Korea–U.S. Free Trade Agreement (KORUS FTA) was a “horrible deal,” pointing to a substantial increase in the U.S. trade deficit with Korea following the agreement’s implementation in March 2012. Notably, during the same period, the U.S. trade balance with numerous other major trading partners, none of which maintained an FTA with the United States, also deteriorated, raising doubts as to whether the KORUS FTA was the primary cause of the observed imbalance. This study evaluates the causal effect of the KORUS FTA on the U.S.–Korea trade balance using a difference-in-differences framework, complemented by event-study and synthetic control analyses as robustness checks. The empirical findings, after accounting for business cycle fluctuations, provide overall support for Trump’s assertion.