US Tariff Bomb Looms... Korea Strives to Defend ‘15%’ Cap

Trump Moves on Section 301 of Trade Act
Measures Targeting Products Made with Forced Labor
South Korean Government Makes All-Out Effort to Defend Final Tariff Rate

As the United States' global tariff measure of 10% is set to expire in two days, the Donald Trump administration announced that it plans to make a final announcement as soon as July 23 (local time) on a new "forced labor tariff" based on Section 301 of the Trade Act. The Korean government is accelerating efforts to implement its first major investment project in the U.S. and is working to maintain the "15%" tariff ceiling secured through the Korea-U.S. trade agreement.

U.S.: "Final Response Measure as Early as Tomorrow"

Jameson Greer, United States Trade Representative (USTR), appeared before the U.S. Senate Finance Committee hearing on the 22nd and stated, "As early as tomorrow (the 23rd), the USTR will announce final response measures against 60 trade partners regarding products made with forced labor." He emphasized, "The United States is the only country in the world to adopt and effectively enforce such (forced labor product response) rules," adding, "This investigation is the culmination of years of efforts to get our trading partners to join us in these efforts and to create a fair environment for American workers and businesses."

Greer asserted that the tariff policies of the Trump administration have been successful and claimed that a national trade emergency continues. He said, "While the specific authorities used by the Trump administration have changed, the trade strategy has not," stressing, "We will continue to use tariffs."

Jamieson Greer, representative of the United States Trade Representative (USTR), is testifying and answering questions at the U.S. Senate Finance Committee hearing on the 22nd (local time). Photo by Reuters Yonhap News

The Trump administration introduced a 10% global tariff based on Section 122 of the Trade Act after the U.S. Supreme Court ruled last February that the reciprocal tariffs it had imposed on other countries were illegal. The measure was valid for up to 150 days and was expected to end in July.

As an alternative, the USTR proceeded with investigations for imposing tariffs under Section 301 of the Trade Act in two areas: structural overproduction and forced labor. Last month, they announced plans to impose an additional 10-12.5% tariff on about 60 economic zones. In particular, Korea, along with Japan, China, and Australia, was included among 46 economic zones facing a higher 12.5% tariff. The United States judged that these countries had failed both to introduce and to effectively enforce import bans on forced labor products. However, some critics have pointed out that the U.S. justifications of forced labor and overcapacity lack logical strength when applied to allies rather than to China and other such countries.

Korean Government's Final All-Out Response

The Korean government has determined the 15% tariff agreed upon through the Korea-U.S. trade agreement as the final rate, and is making every effort to defend this cap. If the ceiling is exceeded, Korea faces the risk of failing to benefit from the agreed tariff reductions, even while fulfilling its promise of $350 billion in investments in the United States.

Kim Jungkwan, Minister of Trade, Industry and Energy, told reporters at Dulles International Airport near Washington, D.C. on the same day that the first target of a $200 billion investment in the United States would be announced as early as the end of next month. He also revealed that the first project is likely to be in the energy sector. Kim Yongbeom, policy chief at the presidential office, has similarly projected that the first major U.S. investment project will become visible around August or September. It has been reported that Minister Kim plans to convey Korea's position regarding Section 301 tariffs. Yoh Han-koo, Deputy Minister for Trade Negotiations at the Ministry of Trade, Industry and Energy, is also expected to meet with Greer for consultations.

Kim Jungkwan, Minister of Trade, Industry and Energy, is arriving at Dulles Airport near Washington DC, USA, on the 22nd (local time). Photo by Yonhap News Agency

In addition to the results of the forced labor investigation, the possibility of further tariffs is drawing attention. On this day, the United States imposed an additional 25% tariff on Brazilian-made products such as agricultural machinery, wood products, ethanol, and apparel based on Section 301. According to foreign media, this is the first time the Trump administration has applied a strategy of conducting unfair trade practice investigations under Section 301. The Brazilian government and the National Confederation of Industry (CNI) estimated that this measure would affect $7 billion to $11 billion (approximately 18-26% of total exports) in exports to the United States.

Canada has also recently declared an additional 50% tariff based on Section 388 of the Customs Act enacted in 1930. In Canada’s case, the United States has stated that tariffs will be enforced starting after 30 days, which analysts interpret as a move to strengthen America's hand in follow-up negotiations for the United States-Mexico-Canada Agreement (USMCA). However, President Trump, when asked about Canadian tariffs during a summit meeting with the President of Lebanon the previous day, shifted responsibility to the counterpart, stating, "Canada has been very, very tough on us for over 50 years."

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