The new rate, 10 to 15 percent, replaces many duties invalidated by the court and takes effect immediately. It is being imposed under Section 122 of the Trade Act of 1974, a rarely used provision that allows temporary tariffs of up to 15 percent for up to 150 days to address balance-of-payments problems.
For Korea, which consistently runs large trade surpluses with the United States, the move signals that Washington’s tariff strategy is entering a new legal phase rather than winding down.
On Friday, the Supreme Court ruled that Trump lacked authority to impose sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), rejecting the administration’s argument that the 1977 law implicitly authorized such measures.
The ruling dismantled a core pillar of Trump’s second-term trade policy. But the White House responded swiftly.
Within hours, the administration reinstated a 10 percent global tariff under Section 122. A day later, Trump said on social media that he intended to raise the rate to the fully permitted 15 percent level.
“During the next short number of months, the Trump Administration will determine and issue the new and legally permissible Tariffs,” he wrote, vowing to continue his “extraordinarily successful” trade policy.
As of Sunday, the White House had yet to formally update its Friday announcement on the temporary 10 percent surcharge, which was introduced to “address fundamental international payments problems” while complying with the court ruling.
Section 122 limits such tariffs to 150 days. Trump has said the administration will use that window to prepare longer-lasting measures under Section 301 of the 1974 Trade Act, which requires formal investigations into alleged unfair trade practices.
The rapid shift underscores a clear strategy: rotate legal authorities to preserve tariff leverage despite judicial constraints.
Why and where Korea is exposed
Korea’s vulnerability lies in its persistent trade surplus with the United States, driven by strong exports of automobiles, electronics, machinery, batteries and industrial components.
Under Section 122, tariffs must be applied universally and cannot target specific countries. But the provision is justified on balance-of-payments grounds, making surplus countries politically sensitive in Washington.
From the U.S. perspective, Korea fits that profile.
A uniform 15 percent surcharge weakens Korean exporters’ price competitiveness and reduces their ability to absorb costs in the U.S. market, especially as competition from Japan, Southeast Asia and Mexico intensifies.
Korea’s exposure is underscored by the scale and persistence of its trade surplus with the United States. Korean exports to the U.S. totaled $127.8 billion in 2023 and rose to $138.1 billion in 2024 before easing to $122.9 billion in 2025, when shipments still grew 3.8 percent from a year earlier. Over the same period, Korea recorded trade surpluses of $44.4 billion in 2023, $55.6 billion in 2024 and $47.9 billion in 2025.
Although the surplus narrowed last year from its 2024 peak, it remains historically high, reinforcing Washington’s perception of Korea as a structurally surplus-running trading partner and keeping bilateral imbalances firmly in the political spotlight.
Short-term impact: manageable
In the near term, the impact on Korean exporters may be manageable.
Under trade arrangements reached in 2025, many Korean products were already operating under tariff ceilings close to 15 percent, linked to large-scale investment and procurement commitments to the United States. In that sense, the new surcharge partly restores a previous baseline.
In addition, goods already covered by national-security tariffs under Section 232 — including steel, aluminum and automobiles — are exempt from stacking, limiting immediate damage in some core sectors.
These factors reduce the risk of an abrupt export shock. The greater threat lies beyond the Section 122 window.
Once the 150-day limit expires, the administration is expected to pivot to more durable tools, including Section 301 investigations into country- or product-specific practices, expanded use of Section 232 national-security tariffs, and sector probes in semiconductors, pharmaceuticals and advanced manufacturing.
Unlike Section 122, these measures can be tailored to specific partners and industries.
For Korea, whose export structure is concentrated in politically sensitive sectors, the risk of selective and longer-lasting barriers remains high. The current surcharge may therefore serve as a bridge to more targeted actions.
For Korean companies, the main cost is not only the tariff rate, but instability. In less than a week, U.S. policy shifted from court invalidation to a 10 percent emergency tariff, then to a 15 percent surcharge under a different statute, with further changes promised.
This volatility creates three immediate problems.
First, contract risk rises as exporters are forced to renegotiate prices and delivery terms.
Second, investment planning becomes more difficult as assumptions about market access continue to change.
Third, compliance costs increase as firms repeatedly adjust to new customs rules and exemptions.
In effect, uncertainty itself becomes a non-tariff barrier.
The tariff shift also complicates Korea’s $350 billion U.S. investment commitment, negotiated partly in exchange for more stable trade conditions.
With the original tariff framework weakened by the court ruling, questions have emerged over how binding the package remains in political and legal terms.
Seoul is unlikely to reopen negotiations, given their links to defense, shipbuilding and energy cooperation. But companies may become more cautious in sequencing projects, using implementation speed as leverage in future talks.
Washington, meanwhile, may continue to cite investment progress as a benchmark in trade negotiations.
Another unresolved issue is whether companies will be able to recover tariffs paid under the invalidated IEEPA regime.
The Supreme Court did not require automatic refunds, prompting firms to prepare legal claims.
For Korean exporters operating under DDP (delivered duty paid) terms or paying duties through U.S. subsidiaries, prolonged refund procedures could strain cash flow, particularly for smaller firms.
Government support for documentation and claims processing is likely to become increasingly important.
For now, the Korean government is opting for restraint rather than retaliation.
Policy priorities include monitoring exemptions and non-stacking rules under Section 122, quiet engagement with Washington on sector-specific risks, and strengthening support for exporters facing refund and compliance issues.
Officials see limited scope for immediate countermeasures and are focusing instead on risk management.
For Korea, the short-term impact may be contained. But with a large and persistent surplus and heavy exposure in strategic industries, the medium-term risks remain firmly in place.
Copyright ⓒ Aju Press All rights reserved.