[Exclusive] "Rising Local Industry Costs"... Korean Firms' Requests to USTR for Section 301 Tariff Exemptions Explained (Comprehensive)

As the deadline for submitting opinions on the U.S. Trade Act Section 301 investigation approaches, it has been confirmed that Korean companies have also submitted requests for tariff exemptions. Companies such as WIA Machine Tools and Hanyang Robotics emphasized the need for cautious application of these measures, citing concerns over reduced investment in the United States and increased supply chain burdens.

According to an analysis by The Asia Business Daily of the list of submitted opinions for the Section 301 investigation posted on the United States Trade Representative (USTR) website as of 8 a.m. on the 14th, two Korean companies were identified among the 117 submissions. Both companies have U.S.-based subsidiaries, and the opinions were submitted under their respective U.S. corporate names.

The USTR announced the launch of the Section 301 investigation on March 11, and plans to accept opinions until midnight on the 15th, after which public hearings will be held from May 5 to 8. The official website is currently accepting submissions of opinions and requests to participate in the hearings. With just one day left until the deadline, the number of submissions has surged by more than 30, as companies rush to participate.

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A partial list of comments submitted on Section 301 investigation posted on the website of the United States Trade Representative (USTR) on the morning of the 14th. Screenshot from the USTR website.

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WIA Machine Tools America, the U.S. subsidiary of the machinery parts manufacturer WIA Machine Tools, submitted its opinion to the USTR on April 9. The company stressed that Section 301 tariffs would directly lead to increased capital investment costs for U.S. manufacturers, resulting in purchase delays and reduced investment. It also expressed concerns that small manufacturers, in particular, could become even more vulnerable to price increases. The company stated, "If higher acquisition costs result in a decline in machine tool sales, it would have a negative impact on domestic service and support activities."

Hyrobotics Corporation, the U.S. subsidiary of Hanyang Robotics, which submitted its opinion on March 19, directly emphasized the value of Korean companies and cooperation with the United States. Hanyang Robotics was acquired earlier this year by the industrial robot company Now Robotics. In its opinion, Hanyang Robotics argued, "Korea's industrial policy is increasingly focused on innovation, supply chain resilience, and the development of high value-added technologies, rather than simply expanding production-based manufacturing." The company also noted that importing Korean equipment has a net positive effect by strengthening U.S. competitiveness, rather than restricting U.S. commerce.

A representative from Now Robotics stated, "Due to the structure of supplying to finished vehicle manufacturers such as Hyundai Motor, the immediate impact of tariffs is limited, but the burden on operating the U.S. subsidiary is inevitably increasing." The representative added, "We plan to formulate specific response measures after experiencing the actual impact this year."

Yeo Hangoo, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy, is meeting with Katherine Tai, United States Trade Representative (USTR), at the 14th Ministerial Conference (MC-14) held in Yaound?, Cameroon, on the 27th of last month (local time). Photo by Yonhap News.

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Industry experts advise that Korean companies should strategically utilize both 'advance exemptions' and 'post-implementation exceptions' for tariffs provided by the U.S. government. Since there are opportunities for exemptions and exceptions, it is recommended to thoroughly analyze the supply chain structure and industrial impact by item within the United States and to respond proactively before and after the public hearings. Previously, the USTR established an 'exception request system' during the first Donald Trump administration.

Report by Won Kyu Shin, Senior Research Fellow at the Korea Economic Research Institute, titled "Status and Response Direction of Section 301 Trade Law Promotion under the Second Trump Administration." The Korea Economic Research Institute.

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Shin Wonkyu, Senior Research Fellow at the Korea Economic Research Institute, advised, "Given the intent of these measures to encourage local production and investment in the United States, it is most effective for exemption requests to be submitted through U.S. companies (or local subsidiaries) or specific organizations, with arguments supported by quantitative data on the economic and security uniqueness of Korean export items, as well as their contribution to price competitiveness, productivity, and job creation for U.S. companies."

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