Yeo Han-koo, South Korea's chief trade negotiator, said the US government's overhaul of tariffs on steel, aluminum, and copper derivatives is expected to reduce the overall administrative burden on Korean companies, though some products may face increased tariff obligations.
"The overall administrative burden is expected to be eased, and uncertainties related to customs clearance have been resolved, which is positive," Yeo, Deputy Minister for Trade at the Ministry of Trade, Industry and Energy, said at a government-industry meeting on the US Section 232 tariff reform held at the Korea Chamber of Commerce and Industry in Seoul on Friday.
The Donald Trump administration revised its tariff system for steel, aluminum, and copper derivatives effective for customs clearance from February 6. Under the previous system, a 50% tariff was applied to the steel, aluminum, or copper content within a product, with country-specific reciprocal tariffs applied to the remainder. The new system imposes tariffs uniformly based on the total customs value for products where steel, aluminum, or copper accounts for more than 15% of the weight.
"With this reform, the complex obligation to calculate content value has been abolished, and tariffs of 50%, 25%, or 15% will be imposed based on the total product price," Yeo said.
According to analysis by the trade ministry, the number of products subject to tariffs will decrease by approximately 17%, equivalent to $2.3 billion in value. Exports of major products including ultra-high voltage transformers, some machine tools, cosmetics, and food products are expected to benefit.
"As the saying goes, 'those who sleep on their rights are not protected,' the active efforts by the government and industry to voice their opinions have contributed to this system improvement," Yeo said.
However, Yeo cautioned that some products may face higher tariff burdens under the new system and noted that the Department of Commerce is scheduled to review the system within 90 days of implementation.
"Uncertainties remain, including the possibility of the Commerce Department or the US Trade Representative adding derivative products at their discretion, so the public and private sectors must maintain close cooperation and continue necessary measures while staying vigilant," he said.
Participants at the meeting said that while the tariff system has been simplified, changes to the scope and criteria for tariff application still pose significant challenges for on-the-ground implementation. Small and medium-sized enterprises in particular may face unexpected disadvantages if they do not fully understand the new system, they warned.
"We will carefully review the industry opinions raised today and actively convey them through various channels including consultations with the US, while continuing support measures such as interest subsidy programs to minimize the burden on companies," Yeo said.