JAKARTA - The United States will impose a maximum combined tariff of 12.5 percent on products originating in South Korea starting Friday. The amount of additional tariffs depends on the basic tariffs that are already in place, while a number of strategic goods are not subject to additional tariffs under Article 301.
Korea JoongAng Daily, quoted on Friday, July 24, said President Donald Trump's administration set tariffs on forced labor goods at 10 percent to 12.5 percent on imports from 60 countries and regions.
South Korea is among the 41 countries and territories subject to a tariff scheme of up to 12.5 percent. The group also includes China, Australia, Brazil, Singapore, and Saudi Arabia.
The policy took effect on Friday at 00.01 local time based on Article 301 of the US Trade Act. The new tariff replaces the global tariff of 10 percent based on Article 122 which expires on the same day.
The United States Trade Representative's Office or USTR assessed that these countries have not adequately implemented and enforced a ban on the import of goods produced by forced labor.
"The United States has had a ban on the import of forced labor goods for almost a century and enforces it strictly. It's time for our trading partners to do the same," said US Trade Representative Jamieson Greer.
The USTR imposed a 10 percent tariff on 19 countries and territories, including Canada, Mexico, the United Kingdom, and India. These countries have banned the import of forced labor goods or committed to implementing them through an agreement with the US.
South Korea is placed in a special category with Japan and Switzerland. The combined tariff of the most favored nation and Article 301 tariffs is limited to a maximum of 12.5 percent.
The most favored country tariff is the basic tariff that applies to trading partners based on international trade rules.
Goods with a basic tariff of 2.5 percent, for example, will receive an additional tariff of Article 301 of 10 percent so that the total will be 12.5 percent.
Goods with a zero percent basic tariff will be subject to a full Article 301 tariff of 12.5 percent. Meanwhile, products whose basic tariff is already 12.5 percent or more do not receive additional tariffs.
Products that have been subject to national security tariffs under Article 232 of the Trade Expansion Act are also exempt from additional Article 301 tariffs.
Therefore, steel, aluminum, copper, passenger cars, buses, trucks, and vehicle parts are not subject to the additional tariffs. These products are not tariff-free because they are already in the Article 232 scheme.
The Trump administration also excluded more than 471 product categories to maintain supply chains and avoid economic disruptions.
The list includes essential raw materials, drugs and pharmaceutical materials, semiconductor production equipment, spare parts for civilian aircraft, used clothing, as well as a number of agricultural and fishery products.
The policy is seen as part of the "America First" trade agenda. According to the USTR, tariffs are used to deal with unfair trade practices, protect US manufacturing industries and workers, and encourage other countries to eradicate forced labor.
Earlier this year, the Trump administration imposed a global tariff of 10 percent for a maximum of 150 days. The temporary tariff is scheduled to expire on Friday after the US Supreme Court in February ruled that the Trump administration's reciprocal tariffs were illegal.
The USTR then used the Section 301 investigation on forced labor and structural overcapacity as a substitute legal basis.
Separate investigations into structural overcapacity against 16 countries are still ongoing. South Korea is among the countries under investigation. Additional tariffs related to the investigation are expected to be announced in the coming months.
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