The U.S. government has broadened its trade concerns with South Korea in its annual trade barrier report. As the scope of scrutiny expands beyond agricultural and technological barriers to encompass non-market policies, labor, and environmental issues, analysts predict an increased likelihood of trade pressure in the future. In response, experts suggest developing strategies based on the U.S. administration’s priorities and potential Section 301 investigations.
South Korea Section Grows by 3 Pages, New Issues Emerge
According to a summary released by the Korea International Trade Association on Wednesday, the 2026 National Trade Estimate Report (NTE) published by the U.S. Trade Representative (USTR) on Tuesday has expanded its coverage of South Korea from 7 to 10 pages. The overall report has grown to 534 pages, an increase of 137 pages from the previous year.
The report assesses foreign trade barriers affecting U.S. exports of goods and services. It’s likely to serve as a foundation for future Section 301 investigations and trade negotiations.
Key new issues highlighted for South Korea include: the administration of tariff-rate quotas (TRQs) for rice and soybeans, value-added tax (VAT) refunds on exports, restrictions on foreign firms’ participation in AI infrastructure procurement, and inadequate measures against tariff evasion.
Regarding rice, the report criticizes the lack of transparency in quota management and disruptions in U.S. rice auctions, underscoring persistent market access issues for agricultural products. While noting the 10% VAT refund on exports, the report explicitly states this isn’t considered a discriminatory trade barrier.
On illegal, unreported, and unregulated (IUU) fishing, the report calls for stronger enforcement of legal fishing practices across South Korea’s distant water fleet. It also points out insufficient cooperation in addressing transshipment and origin fraud in indirect exports.
Digital, Labor, and Environmental Issues Take Center Stage
Digital trade barriers have emerged as a major concern. The report suggests that the bidding process for AI infrastructure, such as high-performance grpahic processing units (GPU) chips, may unfairly favor domestic firms. It also flags data regulations, including local processing requirements for financial data and restrictions on cross-border transfers of location information, as potential market entry barriers.
Labor and environmental sections have been bolstered, now standard items for all trading partners. For South Korea, these include allegations of forced labor in sea salt production, inadequate import bans on goods made with forced labor, and ongoing IUU fishing issues.
Non-Market Practices Scrutiny Extends to South Korea
The newly introduced non-market policies and practices section, primarily targeting China, has been applied to South Korea and other key allies. The U.S. notes that South Korea has not implemented measures to address market distortions resulting from non-market policies.
However, the report acknowledges progress in some areas, such as revised import health requirements for pet food and the establishment of a dedicated channel for U.S. horticultural products, resulting in less critical language on these issues.