Seoul: The overwhelming majority of U.S. exports to South Korea are already tariff-free under a bilateral free trade agreement (FTA), a think tank report showed Wednesday, stressing that no "compelling" rationale has been found for the Trump administration's "reciprocal" tariffs on the Asian country.
According to Yonhap News Agency, the Korea Economic Institute of America released the report, titled "Fairness and Reciprocity? Reconsidering Trump's Liberation Day Tariffs on South Korea," which examined whether the United States' claims about unfair South Korean trade practices are accurate. President Donald Trump announced reciprocal tariffs on April 2-dubbed "Liberation Day"-with tariffs, including 25 percent duties on South Korea, set to take effect on April 9. However, Trump paused the tariffs for 90 days to allow for negotiations.
"In short, this report finds no compelling economic rationale for the Liberation Day tariff rate on South Korea," the report stated. "This suggests that the tariffs are better understood as political tools rather than trade policy rooted in sound analysis." Citing data from the Korea Customs Service and U.S. Department of Agriculture, the report estimated that South Korea's effective weighted average tariff on U.S. imports last year ranged between 0.19 and 2.87 percent-a finding that challenges the higher figures cited by the Office of the U.S. Trade Representative and Department of Commerce.
Measured in trade value, the report highlighted that 95 percent of U.S. exports to South Korea are tariff-free under the bilateral FTA, with most remaining tariffs affecting a narrow range of agricultural products subject to quotas. Of the remaining 5 percent, tariffs will be eliminated from another 4 percent of U.S. exports to South Korea by 2026.
Addressing non-tariff issues, the report noted that bilateral and multilateral mechanisms exist to address these issues "more satisfactorily," expressing concern over the U.S.' unilateral move to address trade deficits. "Ultimately, this report concludes that there is little need to change the U.S.-South Korea trade relationship," it recommended, emphasizing resolving outstanding concerns-especially those related to non-tariff measures-through established bilateral mechanisms under the bilateral FTA rather than unilateral action.
Currently, South Korea and the U.S. are in consultations to reach a wide-ranging deal over U.S. tariffs, South Korea's non-tariff barriers, and economic and industrial cooperation before July 8, when the suspension of reciprocal tariffs ends. Seoul has been seeking to avoid or minimize the impact of new U.S. tariffs, including sectoral tariffs on steel and automobiles.