Following a ruling by the Supreme Court on the legality of retaliatory tariffs, President Donald Trump has implemented a new 10% global tariff on imported goods, structured to be added on top of existing tariffs. This arrangement works in favor of South Korea, which benefits from a free trade agreement (FTA) with the U.S., resulting in most of its export products having a zero percent basic tariff. In contrast, countries like Japan and the European Union still face an average basic tariff of 2-3% for many goods.

The official proclamation released by the U.S. Federal Register specifies that all imports, except for a handful of exempted items, will incur this additional 10% ad valorem duty. For South Korea, the implications are significant as it stands to gain a competitive edge over Japan and EU countries in tariff rates. The South Korean government highlighted these differences during last year’s trade negotiations with the U.S., arguing that there should be a substantial difference in the final rates applied between South Korea and its competitors, although this assertion was ultimately not accepted.

Moreover, the proclamation under the Trade Expansion Act states that products already subject to Section 232 tariffs—such as steel, aluminum, and automobiles—will not face the new global tariffs. However, if only parts of these products are subject to the Section 232 tariffs, the global tariff of 10% will still be applied to the unaffected portions. Additionally, the item list for global tariff exemptions includes various critical minerals, agricultural products, pharmaceuticals, and specific electronic devices. Overall, this new tariff structure highlights the complex interplay of international trade relations and the competitive position of South Korea in its trade with the United States.