The U.S. government announced on the 2nd (local time) that it would impose a 25% reciprocal tariff on all products produced in Korea and imported into the United States.
President Donald Trump made the announcement during a speech at the White House Rose Garden that afternoon. This reciprocal tariff consists of a basic tariff and individual tariffs on so-called "worst countries." They will take effect on the 5th and 9th of this month, respectively. Individual tariffs have been imposed on more than 60 countries, including Korea, China, Japan, the European Union (EU), and Taiwan.
The reciprocal tariff rates are ▲China 34% ▲EU 20% ▲Vietnam 46% ▲Taiwan 32% ▲Japan 24% ▲India 26% ▲Thailand 36% ▲Switzerland 31% ▲Indonesia 32% ▲Malaysia 24% ▲Cambodia 49% ▲UK 10% ▲South Africa 30%, and so on.
The country with the highest tariff is Cambodia (49%). It is followed by Vietnam (46%), Sri Lanka (44%), and Bangladesh (37%), while Korea ranks 13th, similar to Canada and Mexico.
President Trump noted that "Other countries have imposed enormous tariffs on U.S. products and created outrageous non-monetary barriers to destroy our industries," adding, "American taxpayers have been extorted for over 50 years, but that will not happen anymore."
As the United States, the world's largest market, has decided to impose reciprocal tariffs on all imports from all countries, the "Trump-induced tariff war" has begun to expand from some countries to the entire globe. Major countries such as the EU have expressed intentions for retaliatory measures, indicating that the international trade order based on free trade that the U.S. has led is expected to change rapidly.
Korea is facing a national leadership vacuum due to the presidential impeachment situation, causing an escalation in the global tariff war to become an emergency. According to the Korea International Trade Association, Korean exports to the U.S. last year increased by 10.4% to $127.8 billion compared to the previous year. Last year, Korea's trade surplus with the U.S. was $55.7 billion, marking the highest ever. Major export items to the U.S. include ▲automobiles ▲semiconductors ▲petroleum products ▲batteries. According to U.S. Census Bureau, Korea ranked 10th in terms of import scale in January, accounting for 3.4% of the total volume.
Korea has a free trade agreement (FTA) with the United States, so there are virtually no tariffs. However, the Office of the United States Trade Representative (USTR) released a report at the end of last month outlining national trade barriers, including a ban on U.S. beef imports for over 30 months, defense procurement regulations, and digital trade barriers as non-tariff barriers.
In the announcement that day, President Trump also claimed that "All non-monetary (trade) restrictions imposed by Korea, Japan, and many other countries might be the worst."