Trump Hints at Tariff Hike to 15% as Policy Uncertainty Lingers
Despite the US Supreme Court’s decision to strike down President Donald Trump’s reciprocal tariffs, Seoul will continue negotiations over a prior tariff agreement, government and industry sources said Sunday. The move underscores the importance of maintaining economic stability amidst evolving US trade policies.
Trump responded to the ruling by signing an executive order imposing a new 10 percent global tariff, set to take effect Tuesday. He has also signaled that the rate could be raised to 15 percent, though he has not provided a specific legal basis, creating further trade uncertainty for international partners.
In a post on Truth Social, he said he would lift the tariff “effective immediately” to a “legally tested” 15 percent level, indicating a potential shift in approach to trade enforcement.
The new 10 percent baseline tariff is lower than the 15 percent reciprocal tariff previously applied to Korea, but Seoul is maintaining a cautious stance, anticipating that Trump may pursue alternative avenues to advance his agenda, particularly concerning trade relations.
“We are closely monitoring follow-up measures by the US administration and will continue amicable negotiations on implementing the bilateral tariff agreement regardless of the Supreme Court’s ruling,” a ministry official said, emphasizing the commitment to diplomatic solutions.
Industry Minister Kim Jung-kwan said the trade conditions secured through negotiations with Washington would “largely be maintained,” while acknowledging that the ruling has heightened uncertainty for Korea’s exports to the US. Businesses are bracing for potential impacts on supply chains and market access.
The US Supreme Court ruled that the president cannot base reciprocal tariffs on the International Economic Emergency Powers Act. However, other tariff authorities remain intact, highlighting the complexities of US trade law.
Experts say Seoul should avoid hastily reversing its agreement with Washington, noting that tariffs imposed under separate statutes — including Section 232 of the Trade Expansion Act — remain valid. A measured response is deemed crucial to safeguarding national interests.
“It was not only the ‘reciprocal’ tariffs but also item-specific tariffs that placed significant pressure on Korea during last year’s negotiations with the US,” said Jang Sang-sik, head of trade trend analysis at the Korea International Trade Association, pointing to a broader pattern of trade pressures.
Korea’s investment pledge is also tied to broader strategic cooperation in areas such as shipbuilding, energy and nuclear-powered submarine projects, emphasizing the interconnectedness of economic and geopolitical considerations.
For the new baseline tariff, Trump is invoking Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15 percent for up to 150 days without congressional approval. The authority is temporary, and securing longer-term legislative backing could prove difficult, as Democrats and some Republicans oppose elements of his trade policy.
With tariffs remaining a central economic tool for Trump, analysts expect Washington to seek alternative measures to offset potential revenue losses following the court decision, particularly targeting countries such as Korea that are already engaged in negotiations. Businesses should prepare for potential adjustments to existing trade agreements.
Semiconductors are a key area of concern. The Trump administration has floated tariffs of up to 100 percent on chips, though analysts consider such rates unlikely given the US dependence on imports of advanced semiconductors from countries including Korea. The semiconductor industry remains a pivotal sector in the ongoing trade discussions.
Tariffs on Korea’s automotive, steel and battery sectors remain unchanged, as these industries are subject to Section 232 duties tied to national security concerns. Auto tariffs are under renegotiation, with discussions focused on reducing the rate to 15 percent from a potential 25 percent, while steel tariffs remain at 50 percent.
In Seoul, parties on both sides of the National Assembly said they would proceed with legislative procedures related to the investment pledge despite the court ruling. Lawmakers have formed a special committee on US investment and aim to pass the relevant bill at a plenary session scheduled for March 5.
“We plan to carry out the hearing as scheduled and review the government’s position,” said Rep. Kim Sang-hoon of the main opposition People Power Party, who heads the special committee.
The government is also preparing to launch a committee dedicated to implementing the investment agreement, signaling a proactive approach to fostering economic cooperation.
Companies are closely watching developments, as policy uncertainty is viewed as more challenging than the tariffs themselves. Navigating the evolving trade landscape requires adaptability and strategic planning.
“Tariffs are burdensome, but uncertainty is more difficult for companies because it increases planning costs and complicates investment decisions,” an industry official said, highlighting the need for clarity in trade policies.
