South Korea is pressing for an exemption from the hefty tariffs on steel and aluminum imports announced by the U.S., amid concerns over global trade dynamics.
Key Insights
- South Korea requested an exemption due to an existing free trade agreement with the U.S.
- Deputy Trade Minister Park Jong-won emphasized South Korea’s strong investments in the U.S.
- South Korean firms have led global investments into the U.S., fueled by the CHIPS Act.
- The Korea Development Institute warns of possible economic slowdowns due to tariffs.
Request for Exemption
South Korea has officially asked for an exemption from the U.S. import tariffs on steel and aluminum that President Donald Trump is planning. This request leverages the existing Korea-U.S. Free Trade Agreement, which already eliminates tariffs on many goods exchanged between the two nations. As South Korea is a significant exporter to the U.S., particularly in steel, these new tariffs could have widespread implications on trade.
Deputy Trade Minister Park Jong-won visited Washington to hold discussions with U.S. officials concerning the exemption. During the meeting, he highlighted South Korea’s various investments in American soil, underlining the economic benefits of continued strong relations between the two countries. Nearly $21.5 billion was invested by South Korean companies in U.S. projects in 2023 alone, placing it at the top of the list for global investors.
NEW – South Korea says asked US to exclude it from new tariffshttps://t.co/WS3BsJJSB3
— Insider Paper (@TheInsiderPaper) February 21, 2025
Impact of Trump’s Tariffs
Trump’s announcement of a 25% tariff on steel and aluminum imports is part of a broader strategy to address perceived unfair trade practices. However, such moves have been met with concern from allies and trade partners like South Korea. There are concerns that the tariffs might exacerbate existing pressures on the South Korean steel industry, already facing reduced demand globally.
Although the effect of these tariffs on steel might be modest, the potential increase in duties on products such as semiconductors and automobiles could significantly impact South Korea’s export-led economy. The Korea Development Institute even revised the country’s economic growth forecast from 2.0% to 1.6% due to these escalating trade tensions and policy changes.
Looking Forward
South Korea’s acting president, Choi Sang-mok, has called for further analysis of how other major economies are responding to these U.S. trade measures. South Korea seeks to convey its position clearly to minimize potential economic repercussions.
In the face of these challenges, South Korea continues to advocate for high-level consultations to foster cooperation and mitigate any damage resulting from the U.S.’s policies. As diplomatic and trade discussions continue, it remains to be seen how the two countries will navigate this issue.
Sources
- South Korea asks U.S. for exemption from Trump’s proposed tariffs
- South Korea requests exclusion from US plan to increase tariffs
- South Korea says asked US to exclude it from new tariffs
