U.S. Initiates Section 301 Investigation... Blue House to Actively Consult Based on Existing Tariff Agreement
Rebuilding Tariffs Under Section 301 Following Reciprocal Tariff Ruling
"We Will Ensure the Balance of Interests Remains Intact and Korea Is Not Treated Unfavorably"
The Blue House has stated that it will actively consult with the US to ensure that the balance of interests secured under the existing Korea-US tariff agreement is not undermined, following the announcement by the Donald Trump administration that it will initiate investigation procedures against major trading partners, including Korea, based on Section 301 of the US Trade Act.
The Trump administration has shown efforts to restore previous tariffs by utilizing Section 301 of the Trade Act after the US reciprocal tariff law was ruled unlawful. Following last month’s US Supreme Court decision, the US has shifted its approach by maintaining tariffs based on the International Emergency Economic Powers Act (IEEPA), while reorganizing the tariff regime through other legal measures such as Sections 122, 301, and 232 of the Trade Act.
On March 12, a Blue House official stated, “After the reciprocal tariff law was ruled unlawful, the US expressed its intention to restore previous tariffs through Section 301 of the Trade Act. The government plans to actively consult with the US to ensure that the balance of interests secured under the existing Korea-US tariff agreement is not damaged and that Korea is not placed at a disadvantage compared to other major countries.”
On March 11 (local time), the United States Trade Representative (USTR) launched an investigation under Section 301 of the Trade Act targeting 16 major trading partners, including Korea. Section 301 allows for retaliatory measures, such as tariffs, if the trade practices of the partner country are deemed to burden US commerce. Since the Trump administration is attempting to restructure the existing tariff regime by combining temporary measures under Section 122 and initiating Section 301 investigations following the reciprocal tariff law ruling, this investigation is expected to become a key factor in future Korea-US trade relations.
The Blue House is focusing its negotiations on preventing the conditions secured under the existing Korea-US tariff agreement from being effectively nullified or restructured in a way that is less favorable than those offered to major competitors as a result of the Section 301 procedures. As the US is in the process of reorganizing its tariff regime by changing the legal basis, the government must consider not only the tariff rates themselves but also the treatment Korea receives in the process of establishing a new trade order.
Considering that the Trump administration moved swiftly to establish new legal measures immediately after the reciprocal tariff law was ruled unlawful, the current Section 301 investigation is likely to affect the entirety of Korea-US trade negotiations, going beyond a mere administrative procedure. The government plans to closely monitor the scope and pace of the US investigation, as well as the progress of negotiations with other major countries, and to respond proactively to ensure that the export conditions for Korean businesses to the US do not worsen compared to those of competing countries.
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Previously, the Trump administration announced the introduction of a 10% global tariff, to be maintained for up to 150 days based on Section 122 of the Trade Act, immediately after losing the Supreme Court case. Since then, it has stated its intention to restore a more sophisticated country- and item-specific tariff regime by utilizing Sections 301 and 232. In response, observers within and around the Blue House have suggested that the US’s use of Section 301 could serve as more than a legal workaround, potentially becoming a tool for broader pressure in future trade negotiations.
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