The Office of the U.S. Trade Representative (USTR) has announced potential high additional tariffs on 60 trading partners, including South Korea.
The official rationale is that these nations have not adequately prevented the import of goods produced through forced labor, thereby creating an unfair competitive landscape.
With a proposed additional tariff rate of up to 12.5% for South Korea, domestic exporters are growing increasingly concerned.
On Tuesday, the USTR released a statement detailing the findings of its investigation under Section 301 of the Trade Act.
The USTR concluded that all 60 economies under scrutiny have failed to effectively block imports of forced labor-produced goods, placing a strain on U.S. commerce.
Consequently, the USTR has opened a public comment period on proposals to impose additional tariffs of either 10% or 12.5%, depending on the country.
The tariff rates are split into two tiers based on each country’s response level. Six economies, including Canada, the European Union (EU), Mexico, and Indonesia, face a proposed 10% additional tariff due to having some relevant systems in place but lacking effective enforcement.
In contrast, South Korea, along with China, Japan, the United Kingdom, Australia, Taiwan, and 48 other economies, has been classified for a higher 12.5% tariff rate, having been assessed as lacking both legal mechanisms and enforcement systems.
USTR Ambassador Jamieson Greer stated that it’s unacceptable that the key trading partners are failing to address the issue of imported goods produced through forced labor.
He emphasized that this creates an unfair playing field for American workers and signaled a robust response.
This action comes approximately three months after the USTR initiated its investigation on March 12.
Following a February U.S. Supreme Court ruling that deemed reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA) illegal, the administration has been reestablishing tariff barriers using Section 301 of the Trade Act.
Beyond the forced labor issue, the USTR is exerting comprehensive trade pressure, including a proposed 25% retaliatory tariff on Brazil’s digital trade practices.
South Korea is not only subject to the forced labor investigation but is also included in a Section 301 probe into manufacturing overcapacity. Depending on future findings, this could expose key industries like semiconductors and automobiles to additional tariff threats.
The USTR plans to accept written comments until July 6 and will conduct a public hearing on July 7 before finalizing its actions.