The U.S. Trade Representative (USTR) released a notice on final tariff measures at 1:23 p.m. Eastern Time on July 23, determining a 12.5% tariff on forced labor imports from South Korea under Section 301 of the Trade Act, and taking effect on July 24. On July 24, South Korea’s Ministry of Trade, Industry and Energy said it will negotiate with the United States to maintain the tariff rate cap previously agreed between the two sides, under which the total of the two “301 tariff measures” will not exceed 15%.
USTR Announcement: Four Groups of Tariff Classifications, 12.5% Tariff on South Korea’s Forced Labor Imports
According to USTR’s final notice on July 23, 60 economies were reclassified into four groups:
South Korea, Japan, Switzerland: If the current MFN tariff is below 12.5%, add the 301 tariff to bring the total to 12.5%; if the total is already at or above 12.5%, then the 301 tariff is 0%
European Union, Taiwan: Tariff cap set at 10%
17 countries (including Canada, Mexico, the UK, India): Add 10% on top of the current MFN tariff baseline
38 countries (including China, Brazil): Add 12.5%
Exemptions: Cars, steel, and semiconductors subject to Section 232 of the Trade Expansion Act are not included in the add-on tariff scope
These tariffs officially took effect at 12:01 a.m. on July 24.
South Korea Seeks to Maintain a Combined 15% Cap
According to explanations from South Korea’s Ministry of Trade, Industry and Energy, South Korea’s core demand is that “the combined total of the 301 tariff on forced labor and the 301 tariff on excess capacity should not exceed 15%,” in order to comply with the South Korea–U.S. trade agreement. Minister Kim Jong-wan met with U.S. Commerce Secretary Lutnick between July 22 and 23 and met with USTR Greer on July 21 to communicate this position. The U.S. side reiterated its stance on fulfilling the existing agreement but did not make any new specific commitment regarding the 15% cap.
The Ministry of Trade, Industry and Energy said that the 301 investigation into excess capacity is ongoing, and South Korea will continue negotiations to maintain a balance of the interests protected by the South Korea–U.S. tariff agreement.
FAQ
What is the USTR’s 301 tariff rate for South Korea’s forced labor, and when does it take effect?
According to USTR’s final notice on July 23, the 301 tariff rate for South Korea’s forced labor import goods is set at 12.5% (if the current MFN tariff plus the 301 tariff combined is below 12.5%) and officially takes effect at 12:01 a.m. on July 24.
What is South Korea’s core demand in the negotiations?
According to the Ministry of Trade, Industry and Energy’s explanation on July 24, South Korea asks the U.S. side to comply with the South Korea–U.S. trade agreement to ensure that the combined tariff rate of the forced labor tariff and the excess capacity 301 tariff does not exceed 15%; the U.S. side reiterated its position on fulfilling the existing agreement.
Which goods are not affected by the additional 301 tariffs this time?
According to the USTR notice, goods subject to Section 232 of the Trade Expansion Act—including automobiles, steel, and semiconductors—are not included in the scope of the additional 301 forced labor tariffs for this round.
