As the United States implements tariff measures based on Section 301 of its trade law, South Korea has reaffirmed its commitment to not exceed the existing tariff agreement of 15%.
Kim Jung-kwan, Minister of Trade, Industry and Energy, stated during a briefing on September 22 at the Government Complex in Seoul, "The U.S. has indicated that it will maintain the tariff rate at the 15% level, regardless of whether it is under Section 301 or any other form." This statement appears to alleviate concerns that tariffs could exceed the 15% cap following the U.S. investigation into overproduction under Section 301.
Since the February ruling by the U.S. Supreme Court that invalidated reciprocal tariffs, the Trump administration has been restructuring its tariff policies using Section 301. The Office of the United States Trade Representative (USTR) initiated investigations in March into overproduction and forced labor involving 16 economic regions, including South Korea, China, the European Union, Japan, and India.
Subsequently, new forced labor tariffs ranging from 10% to 12.5% were imposed on 60 economic regions, including South Korea, with a 12.5% tariff applied to South Korea. As the announcement of the overproduction investigation is expected soon, there are concerns that tariffs could exceed the previously agreed 15% between South Korea and the U.S. last year.
Last year, South Korea pledged to invest $350 billion in the U.S., including $150 billion in shipbuilding cooperation and $200 billion in strategic investments, in exchange for reducing tariffs from 25% to 15%. The government has confirmed the construction of a gas-fired power plant in Texas as the first project under this investment agreement, while the construction of eight large nuclear power plants and the development of liquefied natural gas (LNG) in Alaska remain subjects for future negotiations.
Minister Kim emphasized that U.S. investment is an unavoidable means to respond to trade pressures, including Section 301. He noted, "If the business becomes unviable, we should withdraw without investing money, but the problem is that if we withdraw from the projects outlined in the memorandum of understanding (MOU), the U.S. may retaliate by raising tariffs." He added, "We used the term 'tilted playing field' during negotiations for this reason."
He also stated, "It is crucial to ensure that unfavorable trade regulations are no longer applied to us," and emphasized that future U.S.-Korea trade relations should be viewed as a process of overcoming ongoing challenges.
According to Minister Kim, there were no additional U.S. demands for semiconductor investments during the recent negotiations. He explained, "While the MOU signed last year included semiconductor language and various items, it was not part of the overall framework of this discussion."
Regarding the U.S. strong demand for the Alaska LNG development project, he confirmed that tariff reduction benefits have been secured. Minister Kim stated, "For the Alaska project, we have received some concrete tariff reduction benefits for Korean-made materials," and added that he has consistently raised the issue of steel tariffs in meetings with U.S. Secretary of Commerce Gina Raimondo, receiving assurances that they would be addressed.
* This article has been translated by AI.
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