The Office of the U.S. Trade Representative (USTR) has signaled additional tariffs on 60 countries, including South Korea, accusing them of failing to take sufficient steps to block imports of goods made with forced labor. Although final rates and covered items may change after public hearings, another tariff storm appears to be brewing from Washington.
On Tuesday local time, the USTR released findings from an investigation under Section 301 of the Trade Act into forced-labor practices in 60 countries worldwide and unveiled a policy proposal that effectively serves as a tariff notice. After the U.S. Supreme Court ruled reciprocal tariffs unlawful in February, the USTR has been investigating forced labor and overproduction in various countries under Section 301 as a replacement framework.
The USTR proposed a 10% additional tariff on countries that prohibit imports of goods produced with forced labor, those that have pledged to adopt and enforce such bans through a "reciprocal trade agreement" with the U.S., and economies that operate partial systems blocking some forced-labor goods. For all other countries, including South Korea, an additional tariff of 12.5% would apply.
The USTR said South Korea lacks the legal framework and enforcement system to block imports of forced-labor goods. The 54 economies grouped with South Korea include Japan, China, Israel, Russia, Taiwan, the United Kingdom and Vietnam.
The report explained that the additional tariffs would apply to all imports from the listed countries, except items specified in an appendix to the Federal Register notice. Excluded items include agricultural and livestock products, critical minerals, oil and natural gas, and chemical and battery raw materials—goods directly linked to U.S. consumer prices or closely tied to economic security.
Items already subject to product-specific tariffs under Section 232 of the Trade Expansion Act, such as automobiles and parts, and steel, aluminum and their derivatives, are also excluded from the additional tariffs. Hyundai Motor, which already faces a 15% product tariff, had been concerned about facing further tariffs under Section 301 but can now breathe a sigh of relief. The USTR asked stakeholders wishing to attend the public hearing to submit appearance requests and testimony summaries by the 22nd of this month. Written comments will be accepted until July 6, with the hearing scheduled for July 7.
The report stressed that "the countries under investigation are undermining the universal goal of eradicating forced labor worldwide by failing to effectively implement bans on forced-labor imports." It also argued that relatively cheap forced-labor products flowing into the U.S. market are hurting American businesses and distorting the market.
Some analysts interpret this as a reference to the Uyghur Forced Labor Prevention Act (UFLPA) introduced by the U.S. Department of Homeland Security in 2021. The U.S. presumes products made in China's Xinjiang Uyghur Autonomous Region to be produced with forced labor and bans their import, and the logic is that other countries should adopt equivalent measures.
In particular, analysts say the USTR has flagged the possibility that South Korea may import raw materials such as clothing, textiles, solar panels, aluminum and battery materials from China that include Xinjiang-made products, then process them and re-export to the U.S. Another cited basis is the U.S. State Department's 2023 human rights report, which noted that South Korea offers weak protections for foreign workers' freedom to change jobs.
Critics argue, however, that the 12.5% and 10% rates appear arbitrary, as the USTR did not disclose how they were calculated.
Until now, the South Korean government has aimed to keep Section 301 tariff rates no higher than the 15% reciprocal tariff. But with a 12.5% rate already emerging just from the forced-labor category—and the possibility of further tariffs being imposed on overproduction grounds under Section 301—the cumulative Section 301 rate could exceed the reciprocal tariff rate.
In a related contribution to the International Monetary Fund's policy magazine F&D Magazine published this month, USTR chief Jamieson Greer cited South Korea's rise as a steel powerhouse despite its relative lack of resources, and argued that Korean government intervention can produce structural trade imbalances. "How could South Korea, with limited energy resources and no coal or iron ore, become a steel powerhouse?" Greer wrote. "Government interventions in various countries have distorted the global economy by leaving some nations in chronic trade deficit and others in surplus."
