Washington Confirms Shift to 15% General Tariff Rate
The United States will reduce its general tariff rate on imports from South Korea to 15%, retroactive to November 1, after Seoul advanced legislation tied to its strategic investment commitments in the U.S. Commerce Secretary Howard Lutnick announced the move on Monday, saying the updated tariff structure unlocks the “full benefit” of South Korea’s trade agreement with President Donald Trump.
Lutnick said the changes apply to a wide range of imports, including automobiles. The U.S. will also remove tariffs on airplane parts and “un-stack” Korea’s reciprocal tariff rate to bring it in line with levels applied to Japan and the European Union. The announcement marks one of the most significant adjustments in trade policy between Washington and Seoul in recent years.
Key Provisions in the Updated Bilateral Deal
Under the agreement, the U.S. caps any future national security tariffs on semiconductors and pharmaceuticals at 15%. This aligns South Korea with other leading Asian technology hubs, including Japan and Taiwan, in sectors where global supply chain stability and competitive equity are considered strategic priorities.
Before the adjustment, imports from South Korea faced tariffs as high as 25%. These included national security-related auto duties levied under Section 232 of the Trade Expansion Act of 1962 and additional “reciprocal” tariffs imposed under the International Emergency Economic Powers Act of 1977. The reduction substantially eases that burden and signals a shift toward reinforcing economic cooperation.
Legal and Political Dimensions
The tariff framework could face further changes pending a ruling from the U.S. Supreme Court. Justices questioned the legal basis for tariffs issued under IEEPA during oral arguments in early November, raising the possibility that the earlier measures could be invalidated in the coming weeks.
South Korea’s ruling party introduced legislation to uphold Seoul’s pledge to invest $350 billion in U.S. shipbuilding and other strategic industries. Lutnick said the investment package underscores the strength of the bilateral economic partnership and contributes directly to U.S. manufacturing capacity and job growth.
Implications for Trade, Industry and Supply Chains
The tariff cuts offer significant relief for Korean automakers and industrial exporters, while U.S. importers benefit from lower input costs amid ongoing supply chain recalibration. The semiconductor and pharmaceutical sectors, in particular, stand to gain from tariff predictability and ceilings on future national security-related duties.
Lutnick framed the move as a long-term commitment to stabilizing U.S.-South Korea economic cooperation, saying he welcomed the “deep trust between our two nations.” Analysts note that while legal uncertainties remain, the reductions help rebalance the trade relationship at a time when global industrial policy is increasingly shaped by geopolitical competition and strategic investment flows.