As a result of the trade negotiations between Korea and the United States, the tariff on automobiles produced in Korea has been lowered from 25% to 15%. However, the tariff on Korean pickup trucks, which was previously subject to the 25% tariff, is not expected to decrease.
Rather, there is also the possibility that the tariff rate could rise to 40%. The domestic import tariff on American pickup trucks is 0%.
According to relevant authorities on the 5th, Korea and the U.S. agreed to collectively lower reciprocal tariff rates to 15%, but could not finalize the tariffs on certain items that previously had high tariffs. Government officials noted that for items other than steel, it was agreed to uniformly lower the tariffs to 15%. The item-specific tariff on steel was maintained at 50%.
However, in reality, there are items other than steel for which it is difficult to consider the tariff lowered to 15%. Korean pickup trucks fall into this category. Korean pickup trucks were subject to a 25% tariff before the U.S. imposed reciprocal tariffs. Government officials believe that it is realistically difficult to lower this tariff to 15%.
A trade authority stated, "The adjustment of tariff rates for specific items is expected to be determined in further negotiations," adding that, "It seems challenging to lower the tariffs on items where the existing tariff rate is higher than the newly established reciprocal tariff rates."
Korea and the United States agreed to eliminate the tariff on Korean pickup trucks by 2021 as part of their free trade agreement. However, during the renegotiation of the Free Trade Agreement in 2018 under the first Trump administration, the elimination of the pickup truck tariff was adjusted to 2041, extending the tariff imposition period by 20 years.
At that time, the Korean government decided to apply a quota to Korean steel exports along with the extension of the deadline for eliminating the pickup truck tariff. This was to reduce export volumes to 70% of the previous year's figures. The steel quotas set at that time have been maintained until this year, and due to the unilateral imposition of item-specific tariffs on steel by the Trump administration, a 50% tariff has been applied.
The issue is that the tariff rate on pickup trucks at 25% is also unclear. There is a possibility that the existing tariff rate, with the addition of a 15% reciprocal tariff, could be raised to 40%. A government official noted, "There remains the possibility that the tariff on pickup trucks could be increased to 40%," adding that, "Maintaining the tariff at 25% is a realistic goal as additional negotiations take place."