Mu-hyup "US Protectionist Measures Targeting China... South Korea Also Indirectly Affected"

International Trade and Commerce Institute 'US Protectionism' Report
US Introduces Successive Policies to Protect Domestic Strategic Industries
Burden Including Cases of Korea Identified as a Detour Route by China

The Korea International Trade Association's International Trade and Commerce Research Institute analyzed that the strengthening trend of U.S. protectionism targeting China ahead of the presidential election in November could also indirectly affect Korean companies.

Graphic=Asia Economy DB

On the 10th, the institute stated this in a report titled "Contents and Impact of Strengthened U.S. Protectionist Measures Ahead of the Presidential Election."

According to the report, the current U.S. administration is continuously introducing policies to strengthen import restrictions and protect its strategic industries such as steel, aluminum, automobiles, batteries, and solar energy. Former President Donald Trump also proposed a 10% universal tariff and a 60% tariff on China as part of his campaign promises.

U.S. import restrictions are being strengthened. Representative examples include the relaxation of anti-dumping and countervailing duty regulations, an increase in the number of new investigations, the setting of broad investigation items, and the designation of South Korea as a transit point for Chinese products circumventing tariffs. From the second half of last year to the first half of this year, the U.S. initiated a total of 107 new import restriction investigations over 12 months, similar to the record high of 120 cases in 2020. Additionally, the U.S. Department of Commerce revised regulations in April to strengthen the enforcement of anti-dumping and countervailing duties.

The revised regulations grant the Department of Commerce greater discretion, making it easier to determine dumping and subsidy payments. They also provide grounds to impose higher tariff rates on investigated companies. In the ongoing case involving aluminum extrusions, broad investigation items have been set, and South Korea has been identified as a transit route for Chinese circumvention exports, indicating that Korean companies need to exercise caution.

Furthermore, the current U.S. administration is taking successive measures to protect key strategic industries. After reviewing the previously postponed Section 301 measures, tariffs under Section 301 on major sectors such as electric vehicles, batteries, solar energy, and critical minerals have been raised up to 100%.

To prevent Chinese steel and aluminum products from entering duty-free through Mexico, the re-imposition of Section 232 tariffs on non-melted products in the North American region was also announced.

With broad regulations on Chinese connected vehicles expected to be announced soon, the report anticipates that not only Chinese-made automobiles but also vehicles manufactured in third countries using Chinese parts and software will be included in the regulatory scope.

Senior Researcher Han Areum stated, "Although most of the U.S. protectionist measures target China, Korean companies should be cautious of unexpected impacts." She added, "With the recent strengthening of U.S. import restriction regulations and the expansion of investigations into Chinese circumvention exports, there is a possibility of high tariffs being imposed on South Korea's exports. Continuous monitoring of import restriction trends and preparation of response strategies are necessary."