U.S. court ruling on Trump's tariffs unlikely to impact Korea's chip, auto exporters

A U.S. court decision striking down the Trump administration’s imposition of 10 percent global tariffs is unlikely to make much difference for Korean exporters, as it would for many companies in other countries. The limited impact is attributed to the ruling’s limited scope — applying only to a handful of small businesses that filed the lawsuit — and the availability of other tariff mechanisms, which only adds to uncertainties.

Korea’s mainstay export items, including semiconductors, cars and petrochemical products, have not been subject to the 10 percent levy as they have been either exempted or put under a separate sectoral tariff.

“The chips produced by Samsung Electronics and SK hyix are not subject to the 10 percent tariffs,” said a source in the local chip industry. 

The U.S. government established a sectoral levy on semiconductors in January, but many chips exported by Korean producers don’t fall under the levy. U.S. tariffs for Korean cars are set at 15 percent. 

A three-judge panel of the U.S. Court of International Trade ruled that the Trump administration’s newly imposed 10 percent global tariffs on all trading partners do not withstand scrutiny under Section 122 of the U.S. Trade Act and declared the measure illegal in a 2-1 decision.  

The decision came after Trump announced a fresh round of tariffs in February by invoking Section 122, a provision that authorizes the president to levy tariffs for up to 150 days, as an alternative to his reciprocal tariffs after the U.S. Supreme Court struck down those imposed under the International Emergency Economic Powers Act (IEEPA) as illegal and void. 

“Given that the court stopped short of issuing a universal injunction suspending the tariff measure altogether and instead ordered tariff relief and refunds only for the plaintiffs in the case, all other importers and exporters outside the recognized plaintiffs remain subject to the Section 122 tariffs,” said the Korea International Trade Association (KITA) in a note released Friday.  

As the Trump administration is expected to appeal the decision, the process could take up to one year, as seen in the legal proceeding concerning Trump’s initial global tariffs under the IEEPA.  

The U.S. administration is also pursuing alternative tariff measures under Section 301 and Section 232.

“The U.S. administration is moving forward with procedures to complete its Section 301 investigation before the expiration of the Section 122 tariffs on July 24, although the law allows such investigations to continue for up to 12 months,” the KITA said.  

In the previous case concerning the IEEPA-backed tariff, some Korean exporters, including Hankook Tire and Technology, LS Cable & System and Hanwha Q Cells, filed a lawsuit against U.S. Customs and Border Protection (CBP) seeking tariff refunds.  

Under the complaint, Hankook Tire asked the Court of International Trade to prevent CBP from imposing additional tariffs on the company’s imported products and to order a full refund of tariffs already paid.

BY PARK EUN-JEE, SARAH CHEA [park.eunjee@joongang.co.kr]