South Korea asks U.S. for exemption from Trump's proposed tariffs
Deputy Trade Minister Park Jong-won made the request as he met with officials from the White House, the Department of Commerce and the Office of the U.S. Trade Representative during a visit to Washington this week, the ministry said.
Park highlighted large-scale investments by South Korean companies in the United States and emphasized that tariffs on almost all items between the two countries have already been eliminated under an existing Korea-U.S. Free Trade Agreement.
He requested that South Korea not be included in tariffs on steel and aluminum as well as reciprocal tariffs on other imported goods, the ministry said.
South Korean firms committed to $21.5 billion of investments in American projects in 2023, making the country the top global investor in the United States for the first time ever, according to U.N. trade data analyzed by the Financial Times.
The surge in investment came as the administration of former President Joe Biden moved to sideline China from its supply chain. Biden's CHIPS Act offered billions of dollars in subsidies and tax breaks to bring semiconductor and clean energy manufacturing back to the United States, drawing in South Korean companies.
Major projects have included Samsung's $17 semiconductor factory in Texas, SK Innovation and Ford's $11 billion electric vehicle and battery plants in Kentucky and Tennessee and Hyundai's $7.6 billion EV plant in Georgia.
South Korea's trade surplus with the United States reached a record-high $55.7 billion last year. Seoul's Finance Ministry said last week that the average tariff rate on imports from the United States stood at just 0.79% as of 2024 and is expected to drop further this year as part of an annual reduction plan.
During his visit to Washington, Park proposed to hold high-level consultations soon to discuss major issues and ways to expand cooperation between the two countries. The ministry added that it would work to minimize the damage from protectionist U.S. trade policies on local industries.
South Korea's top economic think tank recently lowered its 2025 growth forecast from a projection made in November, citing concerns over the impacts of Trump's proposed tariffs and other trade measures.
The state-run Korea Development Institute slashed the country's growth outlook from 2.0% to 1.6% due to still-sluggish domestic demand and slowing export growth
"Following President Trump's election, trade conditions are expected to worsen amid strengthening protectionism, while uncertainty in trade policy is surging," the KDI said in a quarterly report.
Last week, Trump signed an order to impose 25% tariffs on steel and aluminum imports and said he will likely unveil automobile, pharmaceutical and semiconductor duties as early as April.
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