South Korea Challenges U.S. Plan for 12.5% Tariff Over Forced Labor Concerns

The South Korean government conveyed its position to the U.S. on July 9 (local time) that the 12.5% tariff proposed by the Office of the United States Trade Representative (USTR) following a Section 301 investigation into forced labor is unjust.

Lee Seung-heon, a commercial counselor at the South Korean Embassy in the U.S., attended a public hearing hosted by the USTR at the U.S. International Trade Commission (USITC) in Washington, D.C., on this day to present the government's stance regarding the tariff measures announced by the USTR on June 2.

During his testimony, Counselor Lee reportedly expressed concerns that the U.S. tariff measures might fail to accurately reflect the specific circumstances regarding South Korea's imports of goods produced by forced labor.

He also explained that South Korea has been making efforts to address forced labor through domestic and international standards, such as developing the K-ESG Guidelines and promoting the OECD Guidelines for Multinational Enterprises. He further noted that the joint fact sheet resulting from the summit between the two countries last year confirmed South Korea's willingness to cooperate with the U.S. on the issue of forced labor.

Counselor Lee reportedly emphasized the South Korean government's position that the U.S. measures are neither appropriate nor necessary.

Furthermore, he reportedly stressed that even if the U.S. determines that a certain level of tariffs is necessary for the countries under investigation, South Korea should receive more favorable treatment, given that it had previously reached a separate trade agreement with the Trump administration.

In response, the USTR requested that South Korea provide a detailed explanation of its policies to eradicate the import of goods produced by forced labor, and also asked for a timetable regarding specific measures and plans, according to reports.

The USTR's current Section 301 investigation was initiated to replace existing tariffs after the U.S. Supreme Court ruled that the reciprocal tariffs imposed by President Donald Trump in February, citing an economic emergency, were illegal against virtually all trading partners.

Following the investigation, the USTR announced on June 2 that it plans to impose additional tariffs of 10% or 12.5% on imports from 60 economic zones. South Korea was included in the group of 46 economic zones subject to a 12.5% tariff.

This group consists of countries that the U.S. has determined have failed to both introduce and effectively enforce import bans on goods produced by forced labor.

While this public hearing was arranged to submit opposing views on the investigation results, it remains uncertain whether the results will be reversed or modified based on the feedback provided.

Prior to the hearing, the government and the Korea International Trade Association (KITA) submitted a written statement requesting that the 12.5% additional tariff on South Korean products be reconsidered due to a lack of grounds, and that if a tariff is inevitable, it should be lowered to 10%.

The USTR is also conducting a Section 301 investigation into structural overcapacity, in addition to forced labor, and a preliminary hearing on this matter was held on July 5.

Immediately following the ruling that invalidated the reciprocal tariffs, the Trump administration has been imposing a 10% so-called global tariff on trading partners worldwide, based on Section 122 of the Trade Act.

Since these global tariffs can only be imposed for a maximum of 150 days, there is widespread speculation that the results of the overcapacity investigation will be released before this period ends in late July, and that new tariffs will be introduced for trading partners by combining the findings with the forced labor investigation results.

Last year, during the period of President Trump's reciprocal tariff impositions and trade negotiations, South Korea agreed to a 15% tariff rate and signed a new trade agreement with the U.S.

Ultimately, the focus is on what level of tariff rate will be applied to South Korea in this Section 301 investigation.

However, Minister of Trade, Industry and Energy Kim Jeong-gwan previously stated on June 3 that he had held a video conference with U.S. Secretary of Commerce Howard Lutnick, who reportedly told him not to worry about concerns that South Korea's tariff rate could exceed 15%.

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.