The Blue House announced on the 24th that South Korea will consult with the United States to maintain the existing Korea-US tariff agreement. The US imposed forced labor tariffs on 60 countries including South Korea under Trade Act Section 301. The tariffs stem from whether countries have legislated bans on imports of forced labor products, with rates set at 10% for compliant nations and 12.5% for non-compliant ones. A Blue House official stated that both countries share consensus that the tariff agreement must be upheld, emphasizing coordination to ensure the mutually agreed 15% rate remains intact despite ongoing Section 301 investigations including those on supply overcapacity.
US Imposes 12.5% Forced Labor Tariff on South Korea Under Section 301
The US administration announced on the 23rd local time that it would impose forced labor tariffs on 60 countries including South Korea based on Trade Act Section 301. Countries that have legislated forced labor product import bans receive a 10% tariff, while those without such legislation face 12.5%. South Korea falls into the non-implementation group and will be subject to the 12.5% rate. A Blue House official explained that the forced labor Section 301 tariff was imposed on 60 major countries depending on whether they have legislated bans on forced labor product imports.
Blue House Commits to Upholding 15% Korea-US Tariff Agreement
The Blue House stated it will work closely with the US to ensure the bilaterally agreed 15% tariff rate is maintained. A Blue House official said both nations have consensus that the tariff agreement must be observed, adding that close consultations will continue to ultimately preserve the 15% rate agreed between the two countries, including matters related to the ongoing supply overcapacity Section 301 investigation. This indicates South Korea's intent to minimize the impact of the newly introduced forced labor Section 301 tariff and the current supply overcapacity Section 301 investigation on the Korea-US tariff agreement.
Forced Labor Tariff Takes Effect From 12:01 AM EST on 24th
The US Trade Representative (USTR) announced that the measure takes effect from 12:01 AM Eastern Time on the 24th. USTR also noted that a separate Trade Act Section 301 investigation targeting supply overcapacity issues in sectors such as steel and aluminum is currently underway.
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FAQ
What forced labor tariff rate did the US impose on South Korea?
The US imposed a 12.5% forced labor tariff on South Korea under Trade Act Section 301. This rate applies to countries that have not legislated bans on imports of forced labor products, while countries with such legislation face a 10% rate.
Why is South Korea seeking to maintain the 15% tariff agreement with the US?
The Blue House stated that both South Korea and the US have consensus that their existing tariff agreement must be upheld. South Korea aims to ensure the mutually agreed 15% rate remains in effect despite the new forced labor tariff and ongoing Section 301 investigations on supply overcapacity.
