Seoul: South Korea will be recognized as a most favored nation (MFN) by the United States concerning semiconductor exports, as per a bilateral tariff agreement, Trade Minister Yeo Han-koo announced. This status ensures that Korean firms will not be subject to the 100 percent tariff rate announced by U.S. President Donald Trump.
According to Yonhap News Agency, Yeo clarified in a radio interview with broadcaster SBS that if the U.S. sets its semiconductor tariff rate for MFNs at 15 percent, South Korea will also benefit from this rate, even if general tariffs rise to 100 percent or more. The U.S. administration has assured South Korea of MFN status when imposing tariffs on the semiconductor and bio sectors in the future.
Yeo's statements followed President Trump's declaration of an impending 100 percent tariff on semiconductor imports. Yeo confirmed that major Korean chip manufacturers like Samsung Electronics Co. and SK hynix Inc. would not be subject to these high tariffs.
Industry and trade experts anticipate that the U.S. tariff rate for chip imports from MFNs will be set at 15 percent, reflecting a recent agreement with the European Union. The Trump administration's trade deal with Korea did not specify the tariff rate for Korean-made semiconductors but affirmed Seoul's MFN status in the sector.
Additionally, the agreement led the U.S. to reduce reciprocal tariffs for Korea to 15 percent from a proposed 25 percent and lower the tariff rate for Korean cars to 15 percent from 25 percent. In return, South Korea committed to investing $350 billion in the U.S. across shipbuilding, semiconductor, battery, and other industries, alongside a promise to purchase $100 billion of American energy products.
Earlier, U.S. tech company Apple Inc. announced collaboration with Samsung at its Texas foundry plant to develop a next-generation semiconductor intended for iPhone devices.