With the U.S. government's tariff policy being readjusted after the U.S. Supreme Court ruled reciprocal tariff unlawful, an analysis said the competitiveness of Korean products under the free trade agreement (FTA) could strengthen.
On the 22nd, the Korea International Trade Association said the U.S. tariff structure is expected to shift to a "most-favored-nation (MFN) tariff + a 15% tariff under Section 122 of the Trade Act" format.
Under the previous U.S. tariff structure, export competitors to the U.S. such as Japan and the European Union (EU) were subject to an "MFN + reciprocal tariff combined = 15%" format, so Korea, despite having an FTA, faced the same "15% tariff" as those countries. But the revamp of the U.S. tariff structure has created room to see an "FTA effect."
KITA said, "With the United States' new tariff structure, Korea has room to partially regain a price competitiveness edge equal to the MFN tariff exemption effect under the Korea-U.S. FTA," adding, "Because the MFN applied rate exemption is limited to products meeting the Korea-U.S. FTA rules of origin, meticulous management of preferential origin is important."
KITA said that although President Donald Trump issued an executive order immediately after the Supreme Court ruling to promptly halt collection of the reciprocal tariff, tariff collection does not automatically stop at once.
KITA said, "Follow-up guidance from U.S. Customs and Border Protection (CBP) will be announced soon," adding, "There is a chance President Trump will outline the future direction of tariff policy in the State of the Union address on the 24th, so it is necessary to check related developments."
It also advised closely monitoring and responding to what will be included in key documents to be released next month, such as the United States' "trade policy agenda" and the "National Trade Estimate" (NTE).
KITA said that after President Trump imposed a global 15% tariff on all countries and imports under Section 122 of the Trade Act, Korea should also prepare for the possibility that, within the maximum 150-day imposition period of this tariff, investigations under Section 301 of the Trade Act and Section 232 of the Trade Expansion Act could proceed and new tariffs could be levied.
In particular, it noted that major U.S. investors in Coupang petitioned the Office of the United States Trade Representative (USTR) to "initiate a Section 301 investigation," claiming Korea's response to a personal information leak treated U.S. corporations unfairly and discriminatorily. It added, "Korea could also become a potential target of investigation under Section 301 of the Trade Act, so a response is needed."
KITA pointed out that the U.S. government already initiated investigations last year under Section 232 of the Trade Expansion Act into pharmaceuticals, aircraft and jet engines, drones, wind turbines, and robots and industrial machinery, adding, "In addition, it is necessary to prepare for the possibility that tariff measures on semiconductors and derivatives will be expanded and strengthened."
KITA said, "To prepare for tariff refunds, it is necessary to check authority to claim refunds, confirm refund procedures, review settlement priorities for tariffs, and consider whether to bring a case to the Court of International Trade (CIT)," adding, "We will continue support for practical responses to tariff refunds."