U.S. Publishes Federal Register Notice on Retroactive 15% Tariff for Korean Cars Effective November 1

Tariffs on Aircraft, Parts, and Wood Products Retroactively Reduced as of November 14

On December 3 (local time), the U.S. Federal Register published an announcement retroactively reducing tariffs on Korean automobile exports to the United States to 15%. This was a preliminary publication through the online register, with the official publication set for December 4.

Export cars parked at Pyeongtaek Port, Gyeonggi Province. Photo by Yonhap News Agency

The 15% U.S. tariff on automobiles imported from Korea, which takes effect on the official publication date of December 4, will be retroactively applied from 12:01 a.m. on November 1. This tariff rate applies to vehicles and auto parts imported for consumption or released from warehouses for consumption purposes.

Tariffs on aircraft and aircraft parts, as well as logs, timber, and wood products, will also be retroactively reduced, effective from 12:01 a.m. on November 14. For aircraft and their parts, all items covered by the World Trade Organization's Agreement on Trade in Civil Aircraft-except for unmanned aerial vehicles-will be exempt from reciprocal tariffs and tariffs on steel, aluminum, and copper items. Tariffs on logs, timber, and wood products will be adjusted to a maximum of 15%. The retroactively reduced tariff rates will be reflected by amending the Harmonized Tariff Schedule of the United States.

Additionally, the register includes a reduction of Korea's country-specific (reciprocal) tariff rate from the previous 25% to 15%.

This retroactive tariff reduction is a follow-up measure to the "Joint Fact Sheet" announced to implement the agreements reached at the U.S.-Korea summit. The fact sheet, which covers security and trade agreements, stipulates that in return for Korea's $350 billion investment in the United States, the U.S. will reduce tariffs on Korean automobiles and related products, and support or approve Korea's uranium enrichment, spent nuclear fuel reprocessing, and the introduction of nuclear-powered submarines.

In this regard, the two countries agreed in the "Memorandum of Understanding on U.S.-Korea Strategic Investment" signed on November 14 that the tariff reduction would be retroactively applied from the first day of the month in which the relevant legislation is submitted to the Korean National Assembly. Subsequently, when the ruling Democratic Party of Korea introduced the "Special Act on the Management of U.S.-Korea Strategic Investment" (Special Act on Investment in the United States) to the National Assembly on November 26, the retroactive application was implemented.

In the register, the U.S. government stated, "During President Donald Trump's state visit, the presidents of the United States and Korea declared a new chapter in the U.S.-Korea alliance, which serves as a key link for peace, security, and prosperity on the Korean Peninsula and in the Indo-Pacific region." Regarding the joint fact sheet released as an outcome of the U.S.-Korea summit, it added, "We reaffirm the historic announcement of the Korea Strategic Trade and Investment Agreement in July, which reflects the strength and durability of the U.S.-Korea alliance."