The Korea Chamber of Commerce and Industry said the political landscape has shifted after the U.S. midterm elections, but tariff pressure will persist. It predicted Korea will face a double bind: continued pressure from the Donald Trump administration to execute U.S.-bound investments early, and a Democratic-led Congress likely to scrutinize results.
KORCHAM on the 11th released a report, "Outlook for U.S. trade policy after the midterm elections," naming tariffs, investment and legislation not as separate issues but as three interlocking variables, and urged the government and companies to reset their U.S. trade strategies.
First, on tariffs, it assessed that the United States will keep up pressure by invoking Section 301 of the Trade Act and Section 232 of the Trade Expansion Act.
Section 301 of the Trade Act allows retaliatory tariffs and import restrictions when a trading partner's unfair practices are found. Section 232 of the Trade Expansion Act allows the president, following a Commerce Department investigation, to impose high tariffs or restrict imports if imports of specific items are deemed to threaten U.S. national security.
KORCHAM called for a step-by-step, practical approach that preserves existing Korea–U.S. understandings while minimizing additional burdens. It warned that particular caution is needed with the Section 301 "structural overcapacity investigation" launched in March targeting 16 economies including Korea, as it cites 21 manufacturing sectors such as steel, chemicals, autos, batteries, semiconductors and shipbuilding.
It said responses should differ at each stage—investigation, negotiation and implementation. In the investigation stage, it advised submitting comments based on the contribution of Korean intermediate goods and equipment to U.S. manufacturing. In the negotiation stage, it said to spell out exceptions, reductions and conditions tied to local investment. In the implementation stage, it added, companies should closely check actual customs guidance, including product classifications, rules of origin, effective dates and whether existing tariffs will be double-counted.
Recently, the U.S. government has favored a 180-day negotiation period over immediate new tariffs, steering talks with trading partners to induce investment in the United States. KORCHAM stressed that, rather than focusing only on tariff rates, companies should set item-by-item negotiation priorities based on export share and U.S. investment plans and pursue exception terms linked to investment.
On U.S.-bound investment, it said companies must brace for a double burden: "early execution" pressure from the administration and "performance verification" by Congress. Unlike the Trump administration's pressure to fulfill U.S. investment pledges, the new Democratic-led Congress is likely to toughen verification of outcomes such as local hiring and supply chain contributions.
The FIRM bill introduced by Democratic lawmakers in June proposes creating an independent body to oversee whether foreign pledges to invest in the United States are actually carried out and what effects they have on U.S. workers and communities. Passage is uncertain due to a potential presidential veto, but Congress's scrutiny could tighten.
Against this backdrop, KORCHAM urged companies to reassess priorities for strategic investment and to proactively propose projects where they have strengths, taking into account project selection, recovery structures and Korean firms' operating opportunities. It also said they should keep pushing to broaden opportunities for domestic small and midsize partners to join, to secure stability of investment incentives, and to improve visa programs for skilled workers.
KORCHAM advised closely monitoring U.S. legislative trends and expanding communication channels. It said proactive engagement is needed because industry-specific regulations likely to be discussed during year-end negotiations on the National Defense Authorization Act (NDAA) could directly affect Korean companies. Issues such as exceptions to shipyard construction limits, export controls on advanced semiconductors and manufacturing equipment, and changes to procurement standards for critical minerals, robotics and solar could abruptly shake Korean flagship industries' chances to win orders in the United States.
It also urged companies to expand U.S. communication channels beyond the administration to key congressional committees, state governments in investment locations, and local communities. In this midterm, Democrats newly won governorships in more than five states, including Georgia, Texas and Ohio, securing a majority for the first time in 16 years. KORCHAM sees it as essential to build tight consultation channels with state governments that hold core authorities such as permits for data centers and production facilities.
Lee Si-wook, who oversees economic research at KORCHAM, said, "After the midterms, trade policy should focus on negotiations that protect practical interests, strategic investment, and broader cooperation channels," adding, "Companies need to spell out which projects they will join under what conditions and how they will recover returns, and turn U.S.-bound investment into real opportunities for Korea's industries and partner firms."
