[Tariff Second Half] '15% New Normal'... Industry Prepares Practical, Profit-Oriented Strategies

Seeking Ways to Strengthen Presence in the U.S.
Shipbuilding and Automotive Industries Expand Bilateral Cooperation
Semiconductor and Pharmaceutical Sectors Closely Monitor Detailed Conditions

The era of '0% tariffs' between South Korea and the United States has come to an end, and a new standard of 15% has been established. As a result, the industrial sector has begun revising its mid- to long-term strategies. Although the burden of exports to the United States has increased, the disappearance of uncertainty has allowed companies to start preparing practical, profit-oriented countermeasures based on predictability.

The shipbuilding industry is working to specify cooperation measures with the United States, while the automotive industry is maintaining its local investment strategy and preparing plans to expand its market share within the U.S.

The semiconductor and pharmaceutical industries are reviewing the possibility of adjusting their strategies through tariff application simulations. In shipbuilding, joint investment between South Korea and the United States has begun in earnest, and the steel industry is demanding renewed discussions and support measures regarding its exclusion from negotiations.

According to the business community on August 1, Kim Dongkwan, Vice Chairman of Hanwha Group, who led the shipbuilding cooperation initiative during the recent South Korea-U.S. tariff negotiations, returned to Korea immediately after the agreement was reached and arrived early this morning. Lee Jae-yong, Chairman of Samsung Electronics, and Chung Euisun, Chairman of Hyundai Motor Group, who provided support in the semiconductor and automotive sectors, are reportedly still in the United States.

On July 30 (local time), before Vice Chairman Kim's return, John P. Phelan, U.S. Secretary of the Navy, and Russell Vought, Director of the White House Office of Management and Budget, visited the Hanwha Philly Shipyard in Philadelphia, Pennsylvania.

At the event, Vice Chairman Kim stated, "Hanwha, with its world-class shipbuilding capabilities, will use Philly Shipyard as a bridgehead to lead the construction of new shipyards in the United States, nurture shipbuilding talent, reorganize supply chains, and take the lead in ship maintenance, repair, and overhaul (MRO)." He introduced Hanwha's mid- to long-term investment plans and requested cooperation from the U.S. government.

Going forward, South Korea and the United States plan to establish a $150 billion 'Shipbuilding Cooperation Fund' to jointly promote the construction of new shipyards in the U.S., nurture shipbuilding talent, rebuild supply chains, and conduct MRO operations. Secretary Phelan stated, "Strengthening the shipbuilding and maritime industry base is the top priority for the Trump administration and the Navy. Three months ago, I visited Hanwha Ocean's Geoje Shipyard in Korea, and I wanted to see firsthand what kind of investments are being made here at Philly Shipyard as well."

This visit took place ahead of the South Korea-U.S. negotiations, and it is reported that U.S. President Donald Trump decided to conclude the negotiations after receiving a report on the site visit. Secretary Phelan also visited the Geoje Shipyard last April, where Vice Chairman Kim guided him through the commercial vessel and submarine construction sites, as well as the U.S. Navy's 7th Fleet Yukon MRO site. It is unusual for the highest-ranking U.S. Navy official to visit both Hanwha's shipyards in Korea and the United States.

Yonhap News

Since last April, the automotive industry has been hampered by a 25% tariff on certain items, but now plans to use the tariff agreement as an opportunity to expand its market share in the U.S., diversify export markets, and accelerate the transition to future vehicles.

Jose Munoz, CEO of Hyundai Motor Company, posted on his social media immediately after the agreement was reached, stating, "(The South Korea-U.S. trade agreement) provides clarity and predictability for future business," and added, "We will strengthen Hyundai's localization strategy and maintain smooth collaboration between Korea's design, engineering, and production sectors and U.S. manufacturing facilities."

The semiconductor industry, which has invested billions of dollars to establish manufacturing bases in the U.S., is also relieved by the decision to receive 'Most Favored Nation (MFN)' treatment. However, the industry remains highly attentive to the specific tariff rates and application conditions.

The pharmaceutical sector, which also received an MFN promise, remains tense as detailed itemized tariff rates have not yet been disclosed. Unresolved issues remain in the process of bilateral cooperation. Key issues in the digital economy, such as the Online Platform Fairness Act (Onple Law), the export of precision maps, and the problem of reverse discrimination in cloud services, are still pending.