White House Confirms Details of US-Korea Deal, Including 15% Tariff Rate
The White House released a fact sheet Nov. 13 confirming details of the recent U.S.-South Korea tariff deal.
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The fact sheet says tariffs on South Korea will be set at 15% for goods with a most favored nation or U.S.-Korea Free Trade Agreement rate lower than 15%, or at the MFN or KORUS rate if it’s higher.
That applies to both reciprocal tariffs and to Section 232 tariffs on autos and auto parts and lumber and wood derivatives, the fact sheet said.
South Korea has said the 15% tariff cap on autos and auto parts would be retroactive to Nov. 1 (see 2510290036). The White House didn’t immediately comment.
The fact sheet also says the U.S. will apply a Section 232 tariff rate “no greater” than 15% for Korean pharmaceuticals, and will provide terms for any Section 232 tariffs on semiconductors that are “no less favorable than terms that may be offered in a future agreement covering a volume of semiconductor trade at least as large as Korea’s.”
Korea has tied those terms for semiconductors to any rate the U.S. sets in a potential deal with Taiwan.
The White House also said it will remove reciprocal tariffs for Korean “generic pharmaceuticals, generic pharmaceutical ingredients, generic pharmaceutical chemical precursors, and certain natural resources unavailable in the United States.” And reciprocal and Section 232 tariffs no longer will apply to civil aircraft.
The fact sheet confirmed that, in return, Korea will invest a total $350 billion in the U.S., including $150 in the shipbuilding sector, but that the investments don’t have to exceed $20 billion in any calendar year.
The U.S. and Korea also will address non-tariff barriers to U.S. goods, including elimination of a 50,000-unit cap on “U.S.-originating Federal Motor Vehicle Safety Standards (FMVSS)-compliant vehicles that can enter the ROK without further modifications.” Korea also will reduce regulatory burdens for U.S. auto exports.
Likewise, the deal includes provisions on non-tariff barriers for U.S. agricultural products and defense cooperation and spending.