The Ministry of Trade, Industry, and Energy held a meeting with the automotive and battery industries on May 16 to discuss the impact on South Korea of the U.S.’s tariff increase on China.
The U.S. announced a tariff increase on China on May 14, based on Section 301 of the Trade Act, which includes provisions for negotiations and retaliatory measures against unfair practices of trading partners.
With this measure, the U.S. is raising tariffs on $18 billion worth of Chinese goods, including electric cars and steel, which are advanced and core industries. The tariffs on electric cars will increase from 25% to 100%, and batteries will increase from 7.5% to 25%. The tariffs on lithium-ion electric car batteries will rise from 7.5% to 25%, steel and aluminum products from 0-7.5% to 25%, and solar cells from 25% to 50%.
The industry and the Ministry of Industry discussed potential benefits and concerns, including possible backlash in the U.S. market and excessive competition or supply chain connections with Chinese products in non-U.S. markets.
Deputy Trade Minister Yang Byung Nae said, “We plan to continuously monitor China’s response and the reactions of major markets such as the EU. We also aim to strengthen our global market competitiveness while minimizing the negative impact on our industries by supporting the diversification of our industries’ supply chains.”