[Trump Tariffs Ruling] White House Says "Temporary Tariffs Exempt Autos"... Auto Industry Still Uneasy

Introduction of Provisional Tariffs Following Nullification of Reciprocal Tariffs
White House: "Provisional Tariffs on Automobiles and Parts Excluded"
Rising Uncertainty as Scope for Using Auto Tariffs Expands

The recent U.S. Supreme Court ruling that the United States' "reciprocal tariffs" are illegal has made tariff calculations more complicated for the domestic automobile industry. This is because, while product-specific tariffs on automobiles remain in place, the likelihood has increased that the U.S. administration will bring out the option of imposing additional tariffs.

On the 20th (local time), the U.S. Supreme Court ruled that the reciprocal tariffs imposed by the Trump administration on countries around the world, including Korea, were unlawful. As a result, the 15% reciprocal tariff currently applied to Korea will lose its effect.

Yonhap News Agency

U.S. President Donald Trump, citing the International Emergency Economic Powers Act (IEEPA), announced country-specific reciprocal tariffs on trading partners in April last year and imposed a 25% tariff on Korea. He then imposed a 25% "product tariff" on automobiles starting April 3 under Section 232 of the Trade Expansion Act, and a 25% tariff on auto parts starting May 3.

After negotiations between the two governments, the "Memorandum of Understanding (MOU) on Korea-U.S. Strategic Investment" was signed in November last year, and it was agreed that tariff reductions would be applied retroactively as of the first day of the month in which the bill to implement the MOU was submitted to the Korean National Assembly. Once the special bill on investment in the United States was submitted to the Korean legislature, the U.S. government retroactively reduced tariffs on Korean automobiles and other items to 15% as of November 1 last year.

However, because the latest U.S. Supreme Court ruling concerns reciprocal tariffs under the IEEPA, the product tariffs imposed on automobiles will remain unchanged. This is because the product tariffs are measures based on Section 232 of the Trade Expansion Act, not on the IEEPA.

The issue now is that the Trump administration has far more room to immediately add alternative tariff measures. Analysts say there is a possibility that the administration will make up for the reduced tax revenue caused by the nullification of reciprocal tariffs by imposing additional tariffs or by raising product tariffs.

As a countermeasure to the invalidation of reciprocal tariffs, President Trump on this day signed an order imposing a 10% "global tariff" on all countries in the world. He stated on the social media platform Truth Social, "Just signed, in the Oval Office, a Global 10% Tariff on all countries that trade with the United States."

This step is based on Section 122 of the Trade Act, which authorizes the president to impose tariffs of up to 15% for a maximum of 150 days in order to respond to balance-of-payments problems.

However, the White House announced on this day that no provisional import tariffs would be imposed on automobiles and auto parts, including passenger cars and light trucks. An industry official said, "It is welcome news that automobiles have been excluded from the provisional tariffs, but tariff uncertainty has by no means been resolved," adding, "We are closely monitoring the situation because automobile tariffs can be used at any time to gain an upper hand in negotiations."