Auto, chip and steel industries brace for Trump's 'Plan B'

U.S. President Donald Trump’s announcement Saturday that he plans to raise global tariffs to 15 percent has once again thrown domestic export-driven industries into uncertainty.

The remarks came a day after Trump said he would impose a 10 percent global tariff despite a U.S. Supreme Court ruling that found his reciprocal tariffs unlawful. He later indicated the rate would be increased to 15 percent.

Trump’s stance is that he will prepare stronger additional tariffs to replace the reciprocal tariffs struck down by the court, a move expected to further complicate calculations for the Korean government and export-oriented companies.

The automobile, semiconductor and steel industries — considered Korea’s three major export sectors —  maintain that they would not be directly affected by the ruling or subsequent measures, as they are subject to item-specific tariffs rather than reciprocal tariffs. Still, they are closely monitoring the Trump administration’s next steps.

The U.S. Supreme Court recently ruled that reciprocal tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. Korea’s automobiles, which accounted for the largest share of exports to the United States last year and face a 15 percent tariff, as well as semiconductors under tariff negotiations and steel products subject to a 50 percent tariff, are governed by Section 232 of the Trade Expansion Act, which allows tariffs to be imposed on national security grounds.

However, as Trump is widely expected to pursue alternative legal grounds beyond the IEEPA to introduce new tariffs, industries are on alert for what is being described as a potential “Plan B.”

“The United States is strategically fostering its semiconductor industry from the standpoint of economic security, so it could demand export controls or additional investment,” a source from the semiconductor industry said. “New forms of pressure may emerge, so we are preparing responses on multiple fronts.”

“Trump has signaled he could impose tariffs under Section 122 of U.S. trade law, which addresses trade deficits and initiate tariff investigations under Section 301, which targets unfair trade practices,” a steel industry official said. “We will continue to closely monitor developments.”

The shipbuilding industry is also on high alert. The sector has been advancing the “Make American Shipbuilding Great Again” project following last year’s Korea-U.S. trade agreement.

“We are expanding investment and cooperation in the United States in line with government negotiations,” a shipbuilding industry source said. “Any additional variables increase uncertainty.”

Taihan Cable & Solution and Hankook Tire, companies that recently filed lawsuits against the U.S. government, declined to comment. Their U.S. subsidiaries filed lawsuits last month against U.S. Customs and Border Protection, seeking to block tariffs imposed under the IEEPA and to obtain refunds.

The Supreme Court’s ruling that such tariffs are unlawful is seen as strengthening these companies’ legal position.

U.S. Customs and Border Protection collected $133.5 billion in tariff revenue under the IEEPA through mid-December last year, according to the Financial Times.

Trade experts forecast that tariff pressure from the Trump administration is likely to continue even if the term “reciprocal tariffs” is no longer used. Korea is expected to proceed with its planned $350 billion investment in the United States under bilateral trade agreements.

Even so, some analysts say the U.S. court ruling could help improve the price competitiveness of Korean products in the U.S. market.

Korean products could gain an edge in the U.S. market given the FTA between the two countries, the Korea International Trade Association said in a report released Sunday.

“The U.S. tariff structure is likely to shift to a ‘most-favored-nation tariff plus 15 percent’ framework,” the association said. “As a country with an FTA with the United States, Korea could be exempt from most-favored-nation tariffs and regain price competitiveness.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY KIM KYUNG-MI, LEE SU-JEONG [lim.jeongwon@joongang.co.kr]