Government Moves to Respond Swiftly to U.S. Tariff Follow-Up Measures... Industry Minister Vows to Continue Friendly Korea-U.S. Consultations

Trump Administration Shifts to Section 122 After IEEPA Invalidated
Government Reviews Export Impact and Discusses Countermeasures

Kim Jeonggwan, Minister of Trade, Industry and Energy, is delivering opening remarks at the "Public-Private Joint Countermeasure Meeting on the U.S. International Emergency Economic Powers Act (IEEPA) ruling and additional tariff measures" held on the morning of the 23rd at the main conference hall of the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Ministry of Trade, Industry and Energy.

Kim Jeonggwan, Minister of Trade, Industry and Energy, stated in relation to the U.S. Supreme Court ruling that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful that, "Under the principle of maximizing the national interest, we will continue amicable consultations with the U.S. side so that the balance of interests secured through the Korea-U.S. tariff agreement and the export conditions to the United States are not undermined."

Minister Kim made these remarks at the "Public-Private Joint Countermeasure Meeting on the U.S. IEEPA ruling and additional tariff measures" held on the morning of the 23rd at the Korea Chamber of Commerce and Industry in Seoul, adding, "In preparation for possible changes in export conditions, we will tenaciously pursue policies to strengthen the competitiveness of our companies and to diversify exports."

This meeting was convened to examine the impact on Korean industry and exports and to discuss response directions after the Trump administration in the United States announced substitute measures for tariff imposition and follow-up actions immediately after the Supreme Court ruling. Economic organizations, major industry-specific associations, related institutions, and relevant government ministries attended.

Earlier, on the 20th (local time), the U.S. Supreme Court ruled that it is difficult to regard the IEEPA as directly granting the president broad authority to impose tariffs, and therefore judged that reciprocal tariff measures implemented on that basis lack sufficient legal grounds. As a result, existing IEEPA-based tariffs have lost their effect, but the U.S. administration immediately signaled measures using other legal tools, leading to a spread of trade uncertainty.

In particular, as the Trump administration announced a plan to impose a uniform global 15% tariff by invoking Section 122 of the Trade Act and to initiate an investigation under Section 301, questions are being raised about the possibility that tariff policy will be reorganized under a new legal framework. On top of this, tariffs on items such as steel and automobiles imposed under Section 232 of the Trade Expansion Act remain in place, leaving Korea's key export industries simultaneously exposed to multiple institutional variables.

Representatives of the business community and industry-specific associations are concerned that changes in U.S. tariff policy after the IEEPA ruling could translate into new burdens for Korean companies. Section 122 of the Trade Act is a provision that allows the president to impose tariffs on a temporary basis for up to 150 days in response to international balance-of-payments imbalances and similar issues. Accordingly, although the existing IEEPA-based reciprocal tariffs have become invalid, there is concern that, as the legal basis shifts to the Section 122 framework, detailed operational rules such as the application period, the scope of exceptions, and refund procedures may be newly defined.

Section 301 is a provision that allows the United States to impose retaliatory measures such as tariffs after an investigation if it determines that the counterpart country engages in unfair trade practices, and it served as the basis for large-scale, high tariffs during the 2018 U.S.-China trade dispute. While Section 122 is a comprehensive and temporary measure, Section 301 differs in nature in that it is a targeted measure aimed at specific countries or items. Under the Korea-U.S. tariff agreement, Korea has already been subject to tariffs based on a 15% level as a reference, but analysts note that if the legal framework for tariff imposition changes, the burden on companies could vary depending on how the system is operated and on the scope of future investigation targets.

For now, the Korean government takes the position that maintaining the basic framework of the Korea-U.S. tariff agreement is of paramount importance. Minister Kim stated, "We will mobilize all diplomatic and trade channels to ensure that the balance of interests painstakingly derived through Korea-U.S. consultations does not become unsettled," and added, "We will work closely with the U.S. side to ensure that any additional measures minimize their impact on our industries." The government plans to closely monitor developments in the U.S. Congress and administration through its diplomatic mission in the United States and trade channels, and to continuously convey Korea's position.

In addition, the government announced that it will pursue medium- to long-term structural improvements alongside short-term responses. To ease the structure of high dependence on exports to the United States, it plans to step up efforts to develop emerging markets and utilize the free trade agreement (FTA) network, and to accelerate the shift from a price-competitiveness-centered structure to a technology- and quality-centered structure by diversifying supply chains and shifting to high value-added items. The government also decided to strengthen support for companies by cooperating with relevant agencies on practical issues such as tariff refunds, customs clearance procedures, and rules of origin management. Minister Kim said, "Regarding uncertainties such as tariff refunds, we will provide sufficient information in cooperation with relevant agencies and industry associations so that companies can respond in a timely manner."

Going forward, the government plans to formulate a step-by-step response strategy by comprehensively analyzing the specific content and implementation schedule of follow-up measures by the U.S. side, as well as the response moves of other major trading partners. If necessary, it will hold industry-specific meetings and additional public-private meetings as needed to identify on-the-ground difficulties and reflect them in policy.

This content was produced with the assistance of AI translation services.