Government: "Will Consult to Prevent Damage to Korean Companies from US Trade Act Section 301"

Discussion on the Impact on Our Industry Following the U.S. Trade Act Section 301 Announcement

The Ministry of Trade, Industry and Energy held a public-private joint meeting on the 24th, chaired by Deputy Minister Yang Byung-nae, to discuss the impact on the semiconductor, solar power, and steel industries in relation to the U.S. announcement of tariff increases on China.

This meeting was organized to broadly analyze the impact and gather opinions, including not only the semiconductor and steel sectors subject to the tariff increases on China but also the demand companies in the automobile and home appliance industries, following the electric vehicle and battery industry meeting held on the 16th.

Earlier, on the 14th, the U.S. announced plans to increase tariffs on approximately $18 billion worth (about 4% of imports from China) of advanced and core industrial products from China based on Section 301 of the Trade Act. Subsequently, on the 22nd, the U.S. provided additional details on specific items, implementation timing, and exceptions.

According to the U.S. Trade Representative (USTR), tariffs on semiconductors will increase to 50% starting January 1, 2025; steel tariffs will rise to 25% from August 1; and solar cells will face a 50% tariff increase. However, a procedure has been established allowing temporary exclusion requests for machinery used in domestic manufacturing in the U.S. until May 31, 2025. Additionally, tariffs on 19 solar manufacturing equipment items will be excluded until May 31.

During the meeting, discussions were held regarding the potential benefits in the U.S. market due to this measure, excessive competition with Chinese products in markets outside the U.S., and the impact on demand companies due to supply chain linkages with China.

Deputy Minister Yang stated, "As the global trade environment rapidly changes and U.S.-China conflicts intensify, careful and proactive responses to trade issues have become increasingly important for our companies' business activities. We will continue to communicate with the industry regarding the recent U.S. measures and consult with the U.S. government to prevent unexpected damages to our companies."

Meanwhile, the USTR plans to hold a public comment period on this measure until the 28th of next month. The Ministry of Trade, Industry and Energy intends to collect opinions from our industry during this period and submit a government-level opinion letter if necessary.