KITA: "U.S. Court's Tariff Block Faces Differing Interpretations... Korea-U.S. Negotiations Must Continue"

First Ruling on IEEPA Lawsuit
Some Say Tariffs Will Remain for Now
"Need to Monitor the Appeals Process Going Forward"

Regarding the recent decision by a U.S. court to block the reciprocal tariffs announced by the Trump administration, the Korea International Trade Association stated that "opinions are somewhat divided regarding the effect of the ruling." The association emphasized the need to continue negotiations with the United States and to closely monitor the progress of the appeals process going forward.

On May 29, the International Trade and Commerce Research Office of the Korea International Trade Association released a reference document stating, "Technical consultations between Korea and the United States, as well as negotiations with other countries, are expected to proceed as planned for the time being." The office also noted, "There is a considerable possibility that the first-instance ruling could be overturned in the appellate or Supreme Court stages. Therefore, it is inappropriate to overreact or view this ruling as a major turning point."

Previously, on May 28 (local time), the U.S. Court of International Trade issued a decision blocking the implementation of the reciprocal tariffs announced by President Donald Trump on April 2, which was 'Liberation Day.' President Trump has argued that the U.S. trade deficit constitutes a national emergency and has cited the International Emergency Economic Powers Act (IEEPA) of 1977 as the basis for his authority to impose tariffs. This ruling marks the first decision issued amid concerns over the potential abuse of IEEPA and ongoing litigation.

Korea International Trade Association. Yonhap News.

In response, the Korea International Trade Association analyzed that "as a result of the ruling, border tariff measures based on IEEPA against Canada, Mexico, and China, as well as reciprocal and universal tariffs imposed due to the trade deficit, will lose their effect." However, the association explained that there are differing opinions regarding the effectiveness of the ruling. The association stated, "Some interpret that the effect of the tariffs will end immediately, while others believe that, due to appeals and requests for stays of execution, the current tariffs will remain in effect for the time being."

The association further added, "If the first-instance ruling is upheld through to the Supreme Court, tariffs previously imposed under IEEPA, including reciprocal and universal tariffs, could be subject to refunds. However, it is necessary to monitor the progress of the appeals process to determine the starting point for such refunds."

For this reason, the association urged that ongoing negotiations between Korea and the United States should continue as planned. The association emphasized, "The negotiations with the United States involve exchanging opinions on technical matters for each major issue. It is necessary to proceed with these discussions while taking into account potential variables in the United States and to reflect them in the overall strategy as needed."

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