Amid impending announcements of additional tariffs by the U.S. administration under Donald Trump, trade authorities have reportedly confirmed with the U.S. side that the existing tariff agreement cap of 15% will not be exceeded.

During a recent background briefing on investment negotiations with the U.S. held at the Government Complex-Seoul, Minister of Trade, Industry and Energy Kim Jeong-kwan stated, "It is unfortunate that tariffs were not explicitly specified in the agreement for the U.S. investment projects as it was not quite appropriate, but the U.S. side has stated its position to maintain the tariff rate at around the 15% level regardless of whether Section 301 of the Trade Act or any other form is used."

This statement dismisses concerns that U.S. tariff rates could exceed the 15% ceiling following the results of the Section 301 overcapacity investigation by the United States.

The Trump administration has been restructuring its tariff policies using Section 301 of the Trade Act and other measures following the U.S. Supreme Court's ruling in February invalidating mutual tariffs.

In March, the Office of the United States Trade Representative (USTR) initiated investigations into overcapacity and forced labor targeting 16 economic entities, including China, South Korea, the European Union, Japan, and India, based on Section 301 of the Trade Act.

Subsequently, in July, new forced labor tariffs ranging from 10% to 12.5% were newly imposed on 60 economic entities, including South Korea and China.

A tariff of 12.5% was applied to South Korea.

Concerns had been raised that if additional tariffs resulting from the upcoming overcapacity investigation results were also imposed, the tariff rate on South Korean products could surpass the 15% level agreed upon by South Korea and the U.S. last year.

According to Bloomberg and other media outlets, the Trump administration had originally planned to release its trade report on the overcapacity issue before the U.S.-China summit (on September 24), but reportedly delayed the timing to observe the summit's outcome.

Last year, South Korea promised a total of $350 billion in investments in the United States, including shipbuilding cooperation ($150 billion) and strategic investments ($200 billion), on the condition that tariffs be lowered from 25% to 15%.

The South Korean government finalized the construction of the Encinal combined-cycle gas turbine power plant in Texas as the first project for the $200 billion strategic investment in the U.S., while leaving the decisions on constructing eight large-scale nuclear reactors and the Alaska LNG development project as matters for future consultation without reaching a conclusion.

Minister Kim explained that such investments in the U.S. are an inevitable choice to counter trade pressures, including arbitrary U.S. tariff hikes and import restriction measures under Section 301 of the Trade Act.

Minister Kim revealed, "If the business viability drops, we should pull out without funding, but the problem is that if we withdraw from a project under the memorandum of understanding (MOU), the U.S. is set to retaliate by raising tariffs. That is also why we used the expression 'tilting playing field' during negotiations."

He stated, "An important objective is to ensure that disadvantageous trade regulations are no longer applied to us. Our future trade relations with the U.S. should also be viewed as a process of continuously overcoming hurdles. That is reality."

Regarding the Alaska LNG development project strongly demanded by the U.S., South Korea has secured tariff reduction benefits.

Minister Kim stated, "In the case of the Alaska project, we have materialized and received tariff reduction benefits to a certain extent for South Korean equipment. We also raise the issue of steel tariffs every time we meet U.S. Secretary of Commerce Howard Lutnick, and we have secured a response that they will grant them."

Minister Kim noted that there were no additional demands for semiconductor investment from the U.S. during these investment negotiations.

He said, "Although semiconductor wording is included in the MOU (concluded last year) and various items are included, it was excluded from the overall framework of these discussions."