March 5th 2025.
On Wednesday, the South Korean government restated that the average tariff rate for imports from the US is less than 1%, in accordance with the bilateral free trade agreement between the two countries. The government also mentioned that this rate is expected to decrease even further this year. This information was reported by Yonhap news agency.
This statement was made in response to US President Donald Trump's claim that South Korea's average tariff is four times higher than that of the US. He argued that the US is being treated unfairly by both friends and enemies. However, an official from South Korea's Ministry of Trade, Industry, and Energy stated that this is not true. The government plans to address this issue by communicating with the US through various channels, including the US Embassy in South Korea.
The official clarified that Trump's statement may refer to South Korea's tariff on its most-favored nations, which is at 13.4%. This is around four times higher than the 3.3% tariff that the US imposes on its own most-favored nations. However, it is important to note that the majority of US exports to South Korea are currently exempt from tariffs due to the Korea-US FTA.
The Ministry of Trade, Industry, and Energy also mentioned that the average tariff rate for US goods to South Korea was 0.79% in 2020. This rate is expected to decrease even further this year, as stated in the Korea-US FTA. The government plans to clarify that South Korea imposes almost zero tariffs on US goods and to dispel any misunderstandings by communicating with Washington through various channels, including the South Korean embassy in the US and newly established working-level consultative bodies.
Experts believe that Trump's remark may be an attempt to strengthen the US's bargaining power in talks with South Korea regarding tariffs and other issues, such as defense cost-sharing. Lee Tae-kyu, head of the global risk assessment team at the Federation of Korean Industries, stated that Trump may be trying to emphasize that South Korea has an unfairly large trade surplus with the US and that he plans to address it. This has raised concerns that the US may impose reciprocal tariffs on South Korea in the near future.
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