South Korea Navigates Shifting US Trade Landscape After Tariff Ruling
South Korea is bracing for potential trade shifts following the U.S. Supreme Court’s decision to strike down President Donald Trump’s emergency tariffs. Although the ruling invalidates the 15% reciprocal tariffs previously applied to Korean goods, a modern 10% global tariff imposed under Section 122 of the 1974 Trade Act has introduced fresh uncertainty.
Supreme Court Decision and Immediate Aftermath
The Supreme Court ruled against Trump’s use of the International Emergency Economic Powers Act to justify the tariffs, a decision made on February 20, 2026. In response, President Trump immediately enacted a 10% tariff on all imports, effective February 24, 2026. This move underscores the administration’s continued focus on trade adjustments, even after the legal basis for the previous tariffs was dismantled.
Impact on the Korea-US Trade Deal
Despite the evolving tariff situation, South Korean officials maintain that the broader trade agreement with the United States remains intact. Industry Minister Kim Jung-kwan convened an emergency meeting to assess the ruling and affirmed the commitment to the existing framework. Seoul agreed to invest $350 billion in the U.S. For cooperation in advanced industries and shipbuilding under the deal finalized last October.
Navigating New Tariffs and Investment Commitments
The government is closely monitoring the implementation of the new 10% global tariff and its potential impact on Korean exports. There was a recent threat to raise tariffs on auto, lumber, and pharmaceutical products to 25% if Seoul didn’t expedite legislation supporting its investment pledge. Legislative efforts to address this pledge are ongoing in the National Assembly, with a special committee formed to fast-track the necessary bills. A hearing is scheduled for Tuesday, with a plenary session planned for March 5.
Refunds and Future Trade Outlook
The government is working to clarify the process for refunds of duties already paid under the invalidated tariffs. Officials are collaborating with business groups and industry associations to ensure Korean companies receive timely and accurate information. While the court ruling has increased uncertainty, South Korea aims to continue amicable negotiations with the U.S., emphasizing the importance of the bilateral alliance.
Additional Tariff Measures and Ongoing Concerns
Beyond the 10% global tariff, the Trump administration has signaled potential implementation of further tariff measures under Sections 201, 301, and 338 of the Trade Act, adding layers of complexity to South Korea’s trade outlook. Sectoral tariffs on automobiles and steel, imposed under separate laws, remain in place and are unaffected by the Supreme Court’s decision.
Frequently Asked Questions
Q: Will Korean companies receive refunds for tariffs already paid?
A: The government is working to clarify the refund process and will provide information to companies through industry associations.
Q: Is the Korea-US trade deal at risk?
A: No, South Korean officials state the overall framework of the trade agreement remains intact.
Q: What is Section 122 of the Trade Act?
A: It is a provision of the 1974 Trade Act under which the U.S. President imposed a new 10% global tariff.
Q: What investment commitments has South Korea made to the US?
A: South Korea committed to invest a combined US$350 billion in the United States.
Pro Tip: Korean businesses should proactively review their export strategies and explore diversification options to mitigate potential risks associated with the evolving U.S. Trade policies.
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