S. Korea Hit with 12.5% Forced Labor Tariff by U.S., Raising Concerns Over 15% Cap

[Anchor]

As global tariffs expired, the U.S. government imposed forced labor tariffs on 60 regions worldwide. South Korea, along with Japan, was subjected to a 12.5% tariff, but this may not be the end. With another investigation underway citing overcapacity, concerns are growing that the 15% ceiling agreed upon by South Korea and the U.S. last year could be breached.

Reporter Jeong Seong-jin has the details.

[Reporter]

The Office of the U.S. Trade Representative announced tariffs of 10% to 12.5% on 60 regions worldwide, citing a failure to control the import of products made with forced labor.

Based on Section 301 of the Trade Act, a 12.5% tariff took effect for South Korea along with Japan and other regions starting at 12:01 AM on the 24th, Eastern Time.

When the U.S. Supreme Court ruled reciprocal tariffs unlawful last February, the Trump administration imposed a 10% global tariff based on Section 122 of the Trade Act.

As the 150-day expiration approached, Section 301 of the Trade Act was invoked.

[Jamieson Greer / U.S. Trade Representative : This has been a long time coming. This is not reacting to something that just popped up a few months ago.]

Because goods imported from the 60 targeted regions account for 99% of U.S. imports, the move is widely viewed as an extension of reciprocal tariffs under the pretext of forced labor.

Tariffs on specific items like steel and automobiles were excluded, while semiconductors were included in the exemption list considering supply chain shocks.

Although the rate is 2.5 percentage points higher than the previous global tariff, industry experts expect the impact to be limited as it was largely anticipated.

The issue is the possibility of additional tariffs.
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The U.S. is reviewing additional measures under Section 301 for exports it considers overproduced due to unfair subsidies from respective governments, and South Korea is also under investigation.

In initiating the overcapacity investigation, the U.S. Trade Representative pointed to South Korea's trade surpluses in electronic equipment, automobiles, machinery, steel, and ships.

Depending on the investigation results, the 15% tariff cap agreed upon by South Korea and the U.S. last year could be breached.

The South Korean government emphasized to the U.S. side that tariffs must not exceed 15%, and stated that the U.S. side reaffirmed its stance to respect the existing agreement.

Ultimately, South Korea faces the necessity of swiftly implementing the 350 billion dollar investment plan in the U.S., which was a condition of the 15% tariff agreement.

[Kim Tae-hwang / Professor of International Trade, Myongji University : For the first and second (U.S. investment) projects, even if they lean a bit toward what the U.S. wants, we need to pursue them not just without disruption, but much more proactively....]

The South Korean government plans to announce its first U.S. investment project, focusing on energy sectors such as LNG or nuclear power, as early as next month.

(Video by Kim Jong-mi, Design by Kang Yun-jung)
※ Please note: This article was translated by AI and may contain errors.