KITA: "Korea as a Supply Chain Partner... Serving as an Alternative to China"
Request for Exemption of Korean Products with High U.S. Import Share, Such as Bismuth, Indium, and Tungsten
Emphasis on Narrowing the Scope of Derivative Products Like Electric Vehicles and Batteries and Preventing Duplicate Tariffs
Industry Concerns Delivered to the U.S. Department of Commerce and Congress During Washington Visit
The Korea International Trade Association (KITA) has submitted an official opinion letter to the U.S. Department of Commerce in response to the Section 232 investigation under the U.S. Trade Expansion Act, stating that processed critical minerals and related derivative products from Korea do not pose a threat to U.S. national security and, in fact, contribute to the stability of supply chains.
In the official opinion letter submitted to the U.S. Department of Commerce on May 16 (local time), KITA emphasized that Korea, as the chair country of the U.S.-led multilateral 'Minerals Security Partnership,' plays a key role in establishing a stable supply chain.
The U.S. Department of Commerce began the Section 232 investigation on April 22 to assess the impact of imports of processed critical minerals and their derivative products on national security, and accepted opinions from various countries until May 16.
KITA explained that, amid increasing concerns over critical mineral supply instability due to China's recent tightening of export controls, Korean products are serving as an alternative supply source for the United States. In fact, 41.1% of U.S. bismuth imports and 15.9% of indium imports are sourced from Korea. For tungsten, Korea plans to supply 45% of its domestic production to the U.S. starting this year.
KITA particularly stressed that processed critical minerals and their derivative products from Korea do not threaten U.S. national security and therefore should be excluded from Section 232 measures. KITA also called for a reasonable narrowing of the broadly defined scope of derivative products, such as electric vehicles, batteries, and semiconductor wafers, and raised concerns about the possibility of duplicate tariff imposition.
KITA pointed out that if derivative products are additionally designated, as in the case of steel, aluminum, or automotive parts, it will be difficult for companies to establish a predictable regulatory environment. Furthermore, KITA emphasized that certain products, such as electric vehicle batteries and smartphones, are already subject to other Section 232 measures, and thus, dual tariffs should not be imposed on the same items.
Cho Sungdae, head of KITA's Trade Legal Affairs Response Team, stated, "Products such as electric vehicles, motors, batteries, anode materials, and radar systems have a high export ratio to the United States, so tariff measures could impose a significant burden on domestic companies." He added, "Imposing tariffs based on critical mineral content could increase the administrative burden on companies."
Since January, KITA has been operating the Trade Legal Affairs Response Team and submitting opinion letters in response to successive investigations by the Trump administration on copper products, semiconductors, pharmaceuticals, and critical minerals.
From May 12 to May 15, KITA dispatched a private delegation to Washington, D.C., where they visited the Department of Commerce, state governments, and Congress to directly convey the concerns of the domestic industry and continue response activities.
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