The government said on the 3rd it will do its utmost to ensure that the forced labor probe under Section 301 of the U.S. Trade Act by the Office of the U.S. Trade Representative (USTR) does not undermine the Korea-U.S. tariff accord. It said it would work to prevent the U.S. government from imposing an additional 12.5% tariff on imports from Korea based on the investigation's findings.
In a position sent to the press corps that day, the government said it would "actively respond to the brief due in early July and the public hearing, and, taking into comprehensive account the ongoing Section 301 probe on overproduction, do its utmost to ensure that the balance of benefits under the existing Korea-U.S. tariff accord is not undermined."
The USTR said on the 2nd (local time) it would impose an additional 10% or 12.5% tariff on imports from 60 economic jurisdictions that failed to properly implement import bans on products made with forced labor. Korea was included among the countries that could face a 12.5% tariff. It said Korea failed both to introduce and to enforce an import ban on goods made with forced labor.
This tariff measure is under Section 301 of the U.S. Trade Act. Section 301 allows the U.S. administration to respond to unfair policies and practices of foreign governments by measures including tariff imposition.
After the U.S. Supreme Court in February ruled the Trump administration's reciprocal tariff unlawful, the administration imposed a 10% global tariff on all trading partners under Section 122 of the Trade Act. This tariff can be imposed only for up to 150 days and ends July 24. In response, the Trump administration is pushing to introduce a substitute tariff under Section 301 of the Trade Act.
Through tariff talks with the United States last year, Korea pledged $350 billion in investment in the U.S. 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 an overproduction-related probe. If Korea is designated an overproduction country, it would face an additional 5% tariff, raising the tariff rate to 17.5%.