South Korea's National Assembly has established a special committee to review a law addressing U.S. investment, responding to President Trump's pressure on tariffs.
On September 9, the South Korean National Assembly formed a special committee to review a law on U.S. investment, intending to handle the proposed legislation before the 9th of next month. The urgency follows President Donald Trump's recent announcement to raise tariffs on South Korean automobiles and reciprocal tariffs from 15% to 25%, claiming that the Korean legislature is not adhering to agreements made between Korea and the U.S. In light of this, both the ruling and opposition parties agreed on October 4 to expedite the legislative process despite their previous differences. If the special law is passed, the procedures for U.S. investment in South Korea are expected to commence properly.
However, it remains uncertain if the passage of the special law will halt Trump's abrupt announcement on tariff increases. South Korean Foreign Minister Park Jin met with U.S. Trade Representative Jameson Greer on October 4 and shared that the U.S. aims to raise tariffs on South Korea if there is no progress in negotiations regarding non-tariff barriers. Reports suggest that Greer emphasized the potential increase of reciprocal tariffs unless Korea demonstrates good faith or takes concrete measures. The U.S. has outlined specific demands related to non-tariff barriers, such as increased access to agricultural markets, allowing precision mapping for Google, and ceasing the promotion of online platform regulations, all sensitive issues for South Korea.
Initially, there was optimism that non-tariff barriers would be a focal point in tariff negotiations last year, but the U.S. prioritized direct investment instead. South Korea committed to an enormous investment of $350 billion to achieve reductions in automotive tariffs and reciprocal tariffs. Now, the U.S. is exerting pressure, indicating that if its demands regarding non-tariff barriers are not met, tariffs may be raised again. This pattern of the U.S. leveraging its alliances for its own interests raises concerns about the implications for South Korea's industrial sector should tariffs be reintroduced.
