Government Attends USTR 'Section 301' Hearing, Emphasizes 'Market Principles'

U.S. Questions Efforts on Overproduction Restructuring
Korea Highlights Voluntary, Private-Led Industry Reforms
Explains "Complementary" Nature of Korea-U.S. Industries

As the Office of the United States Trade Representative (USTR) ramps up trade pressure targeting overproduction issues, the Korean government has responded by emphasizing the market-based structure of its industries and voluntary restructuring efforts at a Trade Act Section 301 hearing in the United States.

On May 5 (local time), the USTR held a Trade Act Section 301 hearing at the U.S. International Trade Commission (ITC) office in Washington, D.C., focusing on the issue of structural overproduction. This hearing is part of an ongoing investigation initiated by the Donald Trump Administration to seek alternatives to existing tariff policies.

At the hearing, Korean government officials also attended and stressed that Korean industries are operated according to market principles. Regarding certain sectors singled out by the United States for overproduction, they conveyed that restructuring is being led by the private sector, with the government providing institutional support to back these efforts.

On the issue of Korea’s trade surplus with the United States, the Korean side highlighted that the two countries’ industries are not in direct competition but rather have a complementary structure. It was also emphasized that cooperation in manufacturing and other areas is expected to expand, especially following the signing of the Korea-U.S. Strategic Investment Memorandum of Understanding (MOU) last year.

It is reported that the U.S. side focused its questions during the hearing on the progress of Korea’s restructuring efforts and its policy responses. In a written statement submitted to the USTR, the Korean government explained, "We have established an institutional framework to support voluntary restructuring by the industrial sector for the timely resolution of overproduction issues."

Specifically, the government highlighted that it has laid the foundation for restructuring through corporate rehabilitation laws implemented in 2016, as well as enforcement decrees related to strengthening the competitiveness of the petrochemical industry, which passed the Cabinet meeting this April.

The hearing was attended by officials from the USTR, as well as the Department of Commerce, the Department of State, the Department of Transportation, the Department of Homeland Security, and the Small Business Administration (SBA), all part of the Trump Administration. Over 40 panelists participated, including representatives from U.S. industry and trade associations, and the Chinese side, such as those from the China Chamber of International Commerce (CCOIC).

Previously, on April 28-29, the USTR held a separate Section 301 hearing for about 60 economic entities, including Korea, to check compliance with import bans on goods produced with forced labor. At that time, the Korean government explained that it prohibits forced labor based on International Labour Organization (ILO) conventions and domestic legal frameworks.

Once the results of the investigation are released, the U.S. government is expected to determine response measures such as tariff imposition based on country-specific assessments. Section 301 of the Trade Act is a representative trade tool that allows the United States to unilaterally impose sanctions in response to unfair or discriminatory trade practices by foreign governments.

Meanwhile, the Trump Administration has been imposing a 10 percent “global tariff” on all trading partners worldwide, based on Section 122 of the Trade Act following a Supreme Court ruling. However, this measure could only be maintained for up to 150 days. As a result, there is speculation that the Trump Administration may introduce a new tariff regime based on the results of the Section 301 investigation before late July.

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