The government said on the 3rd it will do its utmost to ensure that the forced labor probe underway by the Office of the United States Trade Representative (USTR) under Section 301 of the Trade Act does not undermine the Korea-U.S. tariff accord. It said it will work so the U.S. government does not impose an additional 12.5% tariff on imports from Korea based on the probe's findings.
In a position sent to the press corps the same day, the government said it will "actively respond to the brief due in early July and the public hearing, and, taking into account the ongoing Section 301 probe into overproduction, do its best to ensure the balance of interests under the existing Korea-U.S. tariff accord is not undermined."
The USTR said on the 2nd (local time) it will impose an additional 10% or 12.5% tariff on imports from 60 economies that have not properly enforced import bans on products made with forced labor. Korea was included among countries that could face a 12.5% tariff. It said Korea has failed both to introduce and to enforce an import ban on goods made with forced labor.
Such tariff measures are pursuant to Section 301 of the U.S. Trade Act. Section 301 allows the U.S. administration to respond to unfair policies and practices by foreign governments with measures including tariffs.
After the U.S. Supreme Court in February ruled the Trump administration's reciprocal tariffs unlawful, the administration imposed a 10% global tariff on trading partners worldwide based on Section 122 of the Trade Act. This tariff can be imposed only for 150 days and ends on July 24. In response, the Trump administration is pushing to introduce substitute tariffs under Section 301 of the Trade Act.
Korea, through tariff talks with the United States last year, pledged $350 billion in investment in the United States and lowered the announced reciprocal tariff rate from 25% to 15%. It is currently subject to a 10% tariff under Section 122 of the Trade Act. If an additional 12.5% tariff is finalized based on the forced labor probe, it would approach the previously agreed 15% reciprocal tariff rate set through the Korea-U.S. tariff talks.
The United States also plans to impose additional tariffs through a probe related to overproduction. If Korea is designated an overproduction country, it would have to pay an additional 5% tariff, raising the rate to 17.5%.