South Korea’s leading business groups are pressing the National Assembly to promptly pass a special bill related to Korea’s $350 billion investment commitment to the United States. They warn that delays could weaken Seoul’s position in ongoing trade negotiations and increase the risk of tariffs on Korean goods.
In a unified statement, six major business organizations – the Federation of Korean Industries (FKI), the Korean Chamber of Commerce and Industry (KCCI), the Korea International Trade Association (KITA), the Korea Enterprises Federation (KEF), the Korea Federation of SMEs, and the Federation of Middle Market Enterprises – are urging lawmakers to approve the proposed “Special Act on Managing Korea-US Strategic Investments.”
They emphasize the need for the bill to be passed before the expiration of the parliamentary special committee’s deadline for expedited legislation, which is Monday.
“The longer the ‘Special Act on Managing Korea-US Strategic Investments’ is delayed, the more South Korea’s negotiating power with the US will be undermined, making it harder to realize the tangible benefits of bilateral economic cooperation,” the business groups stated. “We earnestly urge the National Assembly to pass the bill within the special committee’s activity period so that our companies can minimize trade risks and actively expand exports to the US.”
The urgency surrounding the legislation increased in January when then-US President Donald Trump criticized South Korea’s inaction on the special bill and threatened to reinstate “reciprocal” tariffs on Korean products, raising them from 15 percent back to the original 25 percent level agreed upon in the bilateral trade agreement.
A bipartisan parliamentary special committee was established in early February to handle the bill, with the aim of securing its passage before the Monday deadline. The legislation, outlining the framework, procedures, and scope of Seoul’s planned $350 billion investment, was introduced by the ruling Democratic Party in November. However, persistent political tensions have hampered progress in deliberations, leading to increased uncertainty regarding its approval.
Adding to the uncertainty, the US Supreme Court struck down Trump’s “reciprocal” tariffs imposed on nearly all trading partners, including South Korea, on Feb. 20. The court deemed the 1977 International Emergency Economic Powers Act, invoked by Trump to levy the tariffs, insufficient to grant the president the authority to impose such measures, effectively dismantling the legal basis for the reciprocal tariffs.
South Korean goods were previously subject to a 15 percent tariff, reduced from 25 percent, following a bilateral agreement reached after negotiations. As part of the deal finalized late last year, Seoul committed to investing $350 billion in the US in exchange for the tariff reduction.
The Supreme Court’s ruling, while removing the immediate threat of reciprocal tariffs, has raised questions about the long-term stability of the trade agreement between Washington and Seoul.
Business leaders caution that, despite the ruling, Washington could explore alternative legal avenues to maintain its tariff policy or selectively impose duties on specific countries or products.
“Key Korean industries such as semiconductors, automobiles and pharmaceuticals could face direct impacts on export to the US, raising concern about a decline in industrial competitiveness,” the joint statement concluded.
sahn
