The U.S. Supreme Court recently invalidated reciprocal tariffs, leading to increased uncertainty for trade negotiations. In response, President Donald Trump announced a 15% global tariff effective from the 24th, which applies to South Korea, maintaining the current tariffs despite the Supreme Court ruling. The implication is that South Korea could face significant trade pressure, as the new tariffs will not change the previous rates applied on certain goods, such as automobiles and steel.

Following the Supreme Court's decision, mixed effects are anticipated for South Korean exports. The Korea Trade Association noted that before the reciprocal tariffs were enacted, tariffs under the free trade agreement (FTA) were effectively at 0%, which may allow South Korea to regain some pricing competitiveness compared to other nations facing higher tariffs, like Japan and the EU. However, the invalidation of the 'fentanyl tariffs' on China could allow for increased Chinese competitive pricing, while countries with higher reciprocal tariffs than South Korea could see their rates decrease further complicating the market situation for Korea.

Trump's announcement of imminent tariffs under Section 122 and potential investigations under Section 301 by the U.S. Trade Representative (USTR) raise concerns for South Korean stakeholders. The USTR has previously highlighted issues relating to non-tariff barriers in South Korea, especially in the digital sector, indicating that new challenges may be forthcoming unless trade negotiations yield favorable outcomes for the U.S. Competitive pressures are likely to escalate in the next few months as these tariffs are implemented, creating a tense environment for the Korean government and exporting industries.