The Ministry of Trade, Industry and Resources said on the 24th that, in connection with the United States deciding to impose a 12.5% tariff on Korea under Section 301 of its trade law, it will hold talks to keep the previously agreed 15% tariff rate with the United States in place.
The Office of the United States Trade Representative (USTR) on the 23rd (local time) issued its final announcement of tariff measures following a Section 301 investigation related to the import ban on products made with forced labor. The forced labor tariff refers to a tariff that Korea pays when it imports products produced through forced labor in other countries.
In the investigation launched in March, the USTR proposed on June 2 to impose a 10% tariff on 14 countries and a 12.5% tariff on 46 countries including Korea, targeting 60 economies such as Korea, China, the EU, Japan, the United Kingdom, and India, and this announcement finalizes those measures.
According to the Ministry of Trade and Industry (MOTI), the USTR reclassified the 60 economies into four groups. For Korea, Japan, and Switzerland, if the existing most-favored-nation (MFN) tariff is less than 12.5%, the Section 301 tariff will be added so that the total becomes 12.5%, and if it is 12.5% or higher, the Section 301 tariff becomes 0% and the existing MFN tariff is maintained.
For the EU and Taiwan, the ceiling is set at 10%, 17 countries including Canada, Mexico, the United Kingdom, and India will have 10% added to their MFN tariffs, and 38 countries including China and Brazil will have 12.5% added. Items subject to Section 232 of the Trade Expansion Act, such as automobiles, steel, and semiconductors, are excluded from imposition, and the tariff takes effect at 12:01 a.m. on the 24th, when the existing global 10% tariff under Section 122 expires.
Ahead of the expiration of the Section 122 tariff, Minister Kim Jung-kwan of the Ministry of Trade and Industry (MOTI) and Yeo Han-koo, head of the Office of the Minister for Trade, visited the United States and met separately with Commerce Secretary Howard Lutnick (on the 22nd–23rd) and USTR Representative Jamieson Greer (on the 21st) to discuss Section 301 tariffs on forced labor and overcapacity. They asked for compliance with the Korea-U.S. trade agreement, stressing that the combined level of the two Section 301 tariffs should not exceed 15%, and the U.S. side reaffirmed its position to honor the existing agreement.
The overcapacity tariff is imposed on situations where production facilities and actual output are excessive due to government support. The Ministry of Trade and Industry (MOTI) said that, as the Section 301 investigation in the overcapacity area is underway, it will continue consultations with the U.S. side and do its best to ensure that the balance of interests secured by the Korea-U.S. tariff agreement is maintained.