Seoul: The South Korean government has pledged to address rising trade uncertainties after the U.S. Supreme Court invalidated President Donald Trump's extensive "reciprocal" tariffs on South Korea and other trade partners. Despite the ruling, the export conditions secured through the existing trade agreement with the United States are expected to largely remain unchanged.
According to Yonhap News Agency, the Ministry of Trade, Industry and Resources held an emergency meeting to evaluate the impact of the Supreme Court's decision and to plan Seoul's response to the tariff policies under the Trump administration. This meeting was prompted by the U.S. Supreme Court's decision to rule against Trump's application of the 1977 International Emergency Economic Powers Act (IEEPA) to justify tariffs, including reciprocal ones, thereby upholding a prior court ruling.
In response to the legal setback, Trump signed a proclamation to impose an additional global tariff of 10 percent and promised to pursue other tariff actions under different legal frameworks. The South Korean ministry stated that it has been preparing strategies to address the anticipated scenario following the ruling, committing to ongoing efforts to reduce export uncertainties for Korean businesses.
Industry Minister Kim Jung-kwan highlighted that although the ruling introduces uncertainties in exports to the U.S., the core export conditions secured through the Korea-U.S. tariff agreement will essentially remain intact. He emphasized that the government will thoroughly examine the ruling's details and any subsequent measures by Washington to protect Korea's national interests effectively.
On the issue of tariff refunds, which the U.S. ruling did not clearly address, the ministry announced plans to develop support measures to mitigate the impact on Korean companies. Additionally, a meeting with private industries is scheduled for Monday to assess the recent developments' effects on domestic sectors.
Experts have noted that renegotiating the terms of the trade deal with the U.S. could be challenging for Korea despite the altered situation. Austin Chang, president of the institute for international trade under the Korea International Trade Association (KITA), stated that given Trump's negotiation style and the current atmosphere of ongoing talks, it would likely be difficult to reopen discussions on the investment pledge that has already been agreed upon, even with reduced pressure from the U.S. government following the Supreme Court's decision.
Recently, Seoul has faced pressure to accelerate its trade deal implementation with the U.S., with Trump threatening to increase "reciprocal" tariffs and auto duties on Korea back to 25 percent, citing Seoul's insufficient efforts to legislate a special bill supporting its investment pledge to the U.S.
The deal, finalized in October, involves Korea committing to a combined investment of US$350 billion in the U.S. for collaboration in advanced industries and shipbuilding. Yoon Heo, an economics professor at Sogang University, highlighted that the main focus will be on how the latest ruling affects the Korea-U.S. trade agreement; however, attempting to take initiative on this matter now could lead to significant backlash.
Cho Seong-dae, head of the trade policy research office at KITA, pointed out that the U.S. could impose additional sector-specific tariffs at any time under different provisions, such as Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974. He warned that the Trump administration might introduce stronger tariff measures to replace reciprocal tariffs, potentially increasing uncertainties for Korean firms.
Regarding the tariff refund issue, Cho noted that it is a complex matter, as the entities eligible for a refund vary by trade agreement, and the refund process itself is complicated.