This photo shows a port in the southeastern city of Busan on April 30, 2025. (Image courtesy of Yonhap)
SEOUL, Aug. 6 (Korea Bizwire) — South Korea has entered a new era of trade uncertainty as the United States officially begins implementing President Donald Trump’s “reciprocal tariffs” policy, levying a 15% duty on a wide array of Korean exports starting midnight on August 7 Eastern Time.
The tariffs, part of Trump’s broader strategy to realign global trade terms, mark a significant shift for South Korea, whose economy remains heavily dependent on exports to the U.S., which account for roughly 20% of its total overseas shipments.
Though Seoul managed to secure terms similar to those of Japan and the European Union—resulting in a reduction of certain previously announced tariffs—the new measures still represent a substantial burden for Korean businesses. Especially affected are sectors like batteries, cosmetics, and instant noodles, while high-profile exports such as semiconductors and smartphones remain temporarily exempt as U.S. authorities continue separate investigations.
Korea’s automotive industry, which had hoped to retain a competitive edge under the Korea-U.S. Free Trade Agreement (KORUS), faces a new 15% tariff that matches those faced by Japanese and EU automakers. Although the tariff cut from 25% to 15% has been agreed upon, it awaits a formal executive order from the White House, leaving the higher rate temporarily in place.
Steel and aluminum products will continue to be hit with a 50% tariff, with efforts to gain exemptions for specialty steel used in shipbuilding falling short in negotiations. Further clouds loom as the U.S. signals it may soon impose additional duties on semiconductors and pharmaceuticals—two of Korea’s top export categories.
South Korean corporations are scrambling to mitigate the fallout. Hyundai and Kia have already reported combined operating profit losses of over 1 trillion won ($760 million) in the second quarter due to U.S. tariffs. Automakers have urged the government to expedite the implementation of the reduced 15% rate.
U.S. President Donald Trump poses for a group photo with the South Korean negotiation team at the White House in Washington, D.C., on July 30 (local time) after concluding a trade agreement. (Photo source: White House X account)
Electronics and battery manufacturers are also adjusting production strategies. LG Electronics will ramp up operations at its washing machine facility in Mexicali, Mexico, while Samsung plans to diversify output across global sites to remain agile under shifting trade regimes. Battery giants like LG Energy Solution and Samsung SDI are expanding their U.S. operations to localize production.
Steelmakers, however, remain especially vulnerable. While Japan’s Nippon Steel has moved to acquire U.S. Steel, positioning itself to produce domestically and sidestep tariffs, South Korea’s leading steel firms—POSCO and Hyundai Steel—won’t have U.S. production facilities online until at least 2029, lagging behind their Japanese rival by about five years.
With uncertainty mounting, inquiries to KOTRA’s “Tariff Response 119” service have surged, rising from 30–50 daily calls in July to over 100 in early August as companies scramble to assess tariff rates and timelines.
A spokesperson for the Korea Employers Federation summarized the mood: “While the resolution of negotiations is welcome in reducing some ambiguity, the impact of increased tariffs on our exports is unavoidable and will challenge our global competitiveness.”
As the Trump administration’s tariff regime takes hold, Korean exporters are preparing for a “new normal” in trade—one defined by high duties, shifting supply chains, and fierce global competition.
M. H. Lee (mhlee@koreabizwire.com)
