Government: "Limited Market Impact from Tariff Invalidation...24-Hour Close Monitoring"

Market Review Meeting Held
"Responding to Prevent Any Damage to Export Conditions to the U.S."

The government stated that although the impact on financial markets from the increased volatility in U.S.-origin trade variables is "limited," it will "closely monitor U.S. trends and the moves of other countries, and respond in a way that prevents any damage to the balance of benefits secured through the Korea-U.S. tariff agreement and to export conditions to the United States."

On the morning of the 23rd, the Ministry of Finance and Economy held a market review meeting at the Government Complex Seoul, presided over by First Vice Minister Lee Hyungil, to examine market impacts following the U.S. Supreme Court ruling that invalidated reciprocal tariffs. The Bank of Korea, the Financial Services Commission, the Financial Supervisory Service, and the Ministry of Trade, Industry and Energy attended the meeting.

Lee Hyungil, First Vice Minister of the Ministry of Finance and Economy, is speaking at a market situation review meeting he presided over at Government Complex Seoul in Jongno-gu, Seoul on the 23rd. Ministry of Finance and Economy

Earlier, after the U.S. Supreme Court issued a ruling that invalidated a substantial portion of tariffs based on the International Emergency Economic Powers Act (IEEPA), U.S. President Donald Trump, the following day, rejected the ruling and announced that he would maintain his tariff policy by using alternative measures. Citing Section 122 of the Trade Act, he declared that he would impose a 15% tariff on all imports worldwide.

Section 122 of the Trade Act grants the president authority to impose tariffs of up to 15% for a maximum of 150 days in response to balance of payments problems. Having prepared a Plan B in anticipation of the Supreme Court’s ruling of illegality, President Trump has also pledged to mobilize Section 232 of the Trade Expansion Act, Section 301 of the Trade Act, and Section 338 of the Tariff Act to replace the invalidated reciprocal tariffs.

Participants assessed that the impact on global markets was limited, noting that on the day of the U.S. Supreme Court ruling invalidating the reciprocal tariffs, U.S. and European stock markets rose and the U.S. dollar index remained stable.

The government is closely watching the situation, as trade-related uncertainty originating from the United States has grown once again due to this ruling of illegality. Vice Minister Lee said, "Immediately after the ruling, the U.S. government imposed a 10% tariff on the entire world and the next day signaled an increase to 15%, while external risk factors such as geopolitical conflicts continue to exist," adding, "With a heightened sense of vigilance, we will continue to operate a 24-hour market monitoring system and closely examine market conditions."

Participants said, "Regardless of this U.S. Supreme Court ruling, product-specific tariffs on items such as automobiles and steel (based on Section 232 of the Trade Expansion Act) remain in place, and the United States has announced the launch of an investigation under Section 301 of the Trade Act. We will therefore make active efforts to closely monitor U.S. trends and the moves of other countries, and to ensure that the balance of benefits secured through the Korea-U.S. tariff agreement and export conditions to the United States are not undermined."