U.S. Tariff Revisions Expected to Ease Export Burden for South Korean Machinery

The U.S. government’s recent revisions to its tariff system for steel and aluminum derivatives are expected to alleviate the export burden for South Korean machinery manufacturers. With the reduction of tariffs on key industrial machinery such as forklifts, bulldozers, and tractors, approximately $2.3 billion worth of South Korean exports will benefit from these tariff cuts.

The Ministry of Trade, Industry and Energy announced on June 3 that the U.S. government issued a proclamation on June 1 (local time) regarding the revisions to the Section 232 tariff measures on steel, aluminum, and copper derivatives.

The U.S. government explained that the revisions aim to encourage foreign companies to use American-made steel and aluminum. The changes include lowering the threshold for reduced tariffs on U.S. steel usage from 95% to 85%.

Additionally, tariffs on certain industrial machinery items exported from countries with tariff agreements, including South Korea, Japan, the United Kingdom, and the European Union, will be reduced. According to the revisions, the Section 232 tariff rate on certain mobile industrial machinery such as forklifts, bulldozers, and tractors will decrease from 25% to 15%. In contrast, products from countries without tariff agreements will maintain the existing 25% tariff.

Tariffs on agricultural equipment and HVAC systems will also be reduced from 25% to 15%, regardless of tariff agreements. This measure will be effective from August 8 until December 31, 2027.

Conversely, aluminum printing plates and metal racks will be newly included under Section 232 tariffs, incurring a 25% duty.

The Ministry estimates that the total value of U.S. export items expected to benefit from tariff reductions will be around $2.3 billion. The easing of tariffs on forklifts, bulldozers, and tractors is anticipated to improve export conditions to the U.S.

However, as the U.S. has been actively adjusting tariffs on specific items, the government plans to closely monitor the potential for additional U.S. tariff measures.

A ministry official stated, "We will closely monitor trends in U.S. trade measures, including Section 301 investigations, Section 122 tariffs, and Section 232 item tariffs, to minimize the impact on our companies and maintain the balance of benefits under the existing South Korea-U.S. tariff agreement."