"Pharmaceutical Tariffs to Be Announced Soon"
Korea's Top Two Export Items Face 'Bomb Tariffs'
U.S. President Donald Trump warned on the 3rd (local time) that semiconductor tariffs are imminent. Starting from this day, a 25% tariff on foreign-made automobiles began to be imposed, and following the confirmation of a 25% reciprocal tariff the day before, the announcement of semiconductor tariffs has turned the red light on for South Korea's exports.
According to the New York Times (NYT) and others, President Trump told reporters on board a plane heading to Miami that "semiconductor (tariffs) will start very soon."
President Donald Trump announced country-specific reciprocal tariffs against all trading partners worldwide on the 2nd (local time) at the White House Rose Garden. Photo by Reuters Yonhap News
He also hinted at tariffs on other items besides semiconductors. President Trump said, "Pharmaceuticals (tariffs) are a separate category," adding, "They will be announced in the near future and are currently under review."
If semiconductor tariffs are implemented, the damage to South Korea's economy is expected to increase significantly. South Korea's top two export items to the U.S. are facing 'bomb tariffs.' Last year, the scale of automobile exports to the U.S. reached $34.7 billion (about 50.3948 trillion won), and semiconductors amounted to $10.7 billion.
On this day, the reciprocal tariff rate that the U.S. will impose on South Korea was revised to 25%.
President Trump announced country-specific reciprocal tariffs for all trading partners worldwide at the White House Rose Garden the day before. After applying a basic tariff of 10% to all countries, he reviewed each country's tariff and non-tariff barriers and imposed an additional tariff of '10% + α' on so-called 'worst offender' countries deemed to have high trade barriers.
At the time of the announcement, the chart panel showing country-specific tariff rates presented by President Trump listed South Korea's rate as 25%. However, the annex to the executive order published later on the White House website recorded it as 26%, causing confusion over the tariff rate.
The South Korean government inquired with the White House, the Department of Commerce, and the U.S. Trade Representative (USTR) about the discrepancy between the reciprocal tariff rate number announced by President Trump and the number in the annex to the executive order he signed, and has been negotiating to revise the tariff rate to 25%. Even a 1 percentage point difference is significant considering the total export volume to the U.S.
Initially, the U.S. side was known to have maintained that the 26% stated in the annex to the executive order was correct. However, on the afternoon of this day, the annex's reciprocal tariff rate for South Korea was revised to 25%, and this was reportedly notified to the South Korean Embassy in the U.S. Besides South Korea, about ten other countries including India, Switzerland, South Africa, the Philippines, Pakistan, Serbia, and Botswana also had discrepancies between the panel and the annex tariff rates. The White House revised the tariff rates for all these approximately ten countries to match the panel rates.
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