Seoul: South Korea will fine-tune its trade strategy as global trade protectionism is becoming a "new normal," the trade minister said Thursday, noting that uncertainties stemming from the United States' tariff scheme continue to linger despite the countries' bilateral trade agreement.
According to Yonhap News Agency, Trade Minister Yeo Han-koo emphasized the persistent uncertainty in the trade landscape despite a recent tariff agreement with the U.S. "We overcame a major hurdle last week by striking a tariff deal with the U.S., but the (trade) situation still remains uncertain," Yeo stated during a meeting on the country's trade strategy.
Yeo highlighted that protectionist policies have become a standard element in global trade, with major economies leveraging their market and technological advantages. In response, the South Korean government plans to reassess its trade strategy to adapt to these evolving conditions. The minister also indicated that the government aims to quickly implement support measures for sectors vulnerable to U.S. tariffs and create a long-term plan to enhance the competitiveness of domestic industries, including diversifying trade networks.
As part of the recent agreement, Washington agreed to lower its reciprocal tariff rate for South Korea to 15 percent from the initially proposed 25 percent, while reducing tariffs on Korean cars to 15 percent from 25 percent. This adjustment contrasts with the 25 percent tariff imposed on all imported cars from countries without a trade agreement with the U.S.
Regarding U.S. President Donald Trump's comments on potential 100 percent tariffs on semiconductor imports, Yeo assured that South Korea would be treated as a most favored nation (MFN) under the bilateral tariff deal. "If the U.S. semiconductor tariff rate for MFNs is set at 15 percent, South Korea will also enjoy 15 percent tariffs regardless of the rate going up to 100 percent or 200 percent," Yeo stated in a radio interview with broadcaster SBS.
Yeo further explained that the U.S. administration has committed to granting MFN status to South Korea for tariffs on the semiconductor and bio sectors in the future. When asked if major Korean chip manufacturers like Samsung Electronics Co. and SK hynix Inc. would be exempt from 100 percent tariffs, Yeo confirmed they would not face such high tariffs.
Industry and trade experts anticipate that Washington's tariff rate for chip imports from MFNs will be set at 15 percent, as the U.S. recently agreed to apply similar duties on European products under a trade agreement with the European Union.