U.S. Launches Section 301 Trade Investigation Against Korea and 15 Others... Move to Restore Reciprocal Tariffs

Following Supreme Court Ruling Invalidating Tariffs, Next Steps Announced
"Overproduction" Criticized... Trade Agreement with Korea "Remains Intact"
No Mention of Platform Regulation, but Additional Investigations Anticipated

The administration of U.S. President Donald Trump initiated an investigation under Section 301 of the Trade Act on the 11th (local time). Following last month's ruling by the U.S. Supreme Court that invalidated the imposition of reciprocal tariffs and fentanyl-related tariffs, the move is seen as the formal beginning of efforts to restore tariffs against 16 economic entities, including Korea.

Jamieson Greer, the U.S. Trade Representative (USTR), announced the start of the investigation, stating, "The United States will no longer sacrifice its own industrial base for countries that shift the burden of overproduction onto us." The countries subject to investigation include Korea, China, the European Union (EU), Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.

President Donald Trump. Photo by Getty Images Yonhap News

Section 301 stipulates that the U.S. administration has the authority to respond to unfair trade practices by foreign governments through the imposition of tariffs and other measures. During his first term, the Trump administration used this law to impose high tariffs on China. On February 20, President Trump revived this law immediately after the Supreme Court invalidated reciprocal tariffs and fentanyl-related tariffs under the International Emergency Economic Powers Act (IEEPA). At that time, he signaled plans to impose a 10% tariff globally under Section 122 of the Trade Act and to launch an investigation for the enforcement of Section 301.

During the briefing, Greer focused on the issue of overproduction in other countries. He said the investigation will "examine the structural overcapacity in the manufacturing sector of specific economic regions, as well as acts, policies, and practices associated with overproduction," adding, "We expect this investigation will reveal various unfair trade practices related to overcapacity and overproduction." He also noted, "Our view is that major trading partners have built up production capacity that does not align with market incentives for domestic or global demand," and pointed out that "overcapacity leads to overproduction, persistent trade surpluses, and underutilization of manufacturing capacity."

The Federal Register published on this day also strongly highlighted the issue of overproduction, citing examples such as the Chinese automaker BYD. Regarding Korea, the report stated, "There is evidence that Korea has developed structural overcapacity and actual production outcomes through large-scale or persistent trade surpluses," and argued that Korea maintains a trade surplus mainly through exports of electronic equipment, automobiles and parts, machinery, steel, and ships. It also noted, "The Korean government has acknowledged the need to reduce production capacity in the petrochemical sector."

The USTR plans to conclude the investigation before the expiration of the current 10% tariff at the end of July. Public comments will be accepted from the 17th of this month until the 15th of next month, and a public hearing is scheduled for May 5.

This investigation appears to be less about responding to genuinely unfair trade practices and more about reviving President Trump's signature reciprocal tariffs while urging countries that already have trade agreements with the United States to comply with those agreements. Although the legal basis has changed, Greer emphasized that "the policy remains the same." He explained, "Depending on court rulings or other circumstances, the means may change, but the policy itself has not changed." Most of the countries under investigation have already concluded trade agreements with the United States. Greer stated that "the agreements will remain in place" regarding such countries, including Korea.

However, it is difficult to rule out the possibility of new tariffs being imposed. Greer stated, "A Section 301 investigation may lead to tariffs or other measures." While he did not specify any particular country or timeline, he cited issues such as digital services taxes and pharmaceutical pricing as potential grounds for additional Section 301 investigations. He added, "Additional country-specific investigations are also anticipated, but at this time, I will not provide specifics."

There was no mention of Korea's platform regulations, an issue that has been repeatedly raised in U.S. political circles. However, as the investigation proceeds, topics related to Coupang may be discussed. Previously, Coupang’s U.S. investors had petitioned the USTR for a Section 301 investigation, alleging discriminatory actions by the Korean government, but later withdrew their petition.

Regarding the investigation under Section 232 of the Trade Expansion Act, which allows for product-specific tariff imposition, Greer said, "I do not expect new measures within the next few weeks, but it remains an option during this administration’s term."

In addition, the USTR plans to launch a Section 301 investigation as early as tomorrow targeting the import of products made with forced labor from about 60 countries.

This content was produced with the assistance of AI translation services.