Trump's 'Section 301 Tariffs' Imminent: Will the 15% Cap Agreed with South Korea Hold?

▲ President Donald Trump

The 10% global tariff imposed by the Donald Trump administration is set to expire on July 24 (local time), following a U.S. Supreme Court ruling that declared reciprocal tariffs unlawful.

It is expected that the Trump administration will soon introduce 'Section 301 tariffs' to replace the global tariffs. The key question is whether the 15% cap, established through a trade agreement between South Korea and the U.S., will be upheld.

Since March, the Office of the United States Trade Representative (USTR) has been investigating various countries under Section 301 of the Trade Act, focusing on two categories: 'overproduction' and 'forced labor.'

The U.S. argues that the import of products resulting from structural overproduction and forced labor places a burden on U.S. trade.

Sixteen economic entities were identified regarding overproduction, and 60 were identified regarding forced labor. South Korea has been targeted under both categories.

Under Section 301 of the Trade Act, the U.S. administration has the authority to respond to unfair or discriminatory practices and policies of foreign governments, including the imposition of tariffs.

Observers suggest that the USTR is highly likely to take action, such as finalizing and announcing forced labor tariffs, as early as this week to coincide with the expiration of the global tariffs.

For South Korea, the structure involves the addition of overproduction tariffs to the previously announced 12.5% forced labor tariff. In late July of last year, South Korea and the U.S. reached an agreement to lower the U.S. reciprocal tariff from 25% to 15%, contingent upon South Korea's $350 billion investment in the U.S.

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