Recently, the US Supreme Court declared counter tariffs imposed by the Trump administration under the International Emergency Economic Powers Act to be illegal. This ruling has significant implications for South Korean exporters and ongoing negotiations with the US. Prior to this ruling, South Korean goods faced a 10% counter tariff effective from April 5, 2022, and the threat of a 25% tariff loomed over bilateral trade. Following negotiations, a temporary agreement reduced the counter tariff to 15%, which has remained in effect following a summit between the leaders of South Korea and the US in late October.

The ruling specifically targets the counter tariffs and the controversial "fentanyl tariffs" applied to goods from China and Mexico, which were justified on the grounds that these countries failed to adequately monitor the influx of fentanyl into the US. However, the ruling does not affect the mechanism for imposing product-specific tariffs designed to protect national security. This means that while counter tariffs can no longer be applied, other tariffs, such as the 15% on South Korean automobiles and the 50% on steel and aluminum products, remain intact, as they are based on national security assessments by the US Department of Commerce.

As a consequence of this ruling, South Korean exporters may find some relief from the burdens imposed by the counter tariffs, but the existence of product-specific tariffs continues to complicate trade relations. While firms may seek refunds for tariffs collected previously, the legal and practical implications of this ruling are likely to be carefully navigated in light of ongoing negotiations for trade agreements, emphasizing the cautious approach that exporters and negotiators must take moving forward.