Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
KITA asks US to exempt chips, pharmaceuticals from Section 232 duties
U.S. President Donald Trump speaks before swearing in former U.S. Senator David Perdue as the U.S. ambassador to the People's Republic of China in the Oval Office at the White House in Washington, Wednesday (local time). UPI-Yonhap
By Lee Min-hyung
The Korea International Trade Association (KITA) has requested a tariff exemption from the U.S. Department of Commerce for chips and pharmaceuticals, arguing that the industries do not pose any security threat to the world’s largest economy, the trade organization said Thursday.
The nation’s largest trade association on Wednesday (local time) sent its public comment that the U.S. should exempt the Korean products from Section 232 duties. The rule authorizes U.S. President Donald Trump to implement trade restrictions such as tariffs.
Under Section 232, the U.S. launched an investigation into imported semiconductors and pharmaceuticals beginning April 1 and accepted opinions from interested parties until Wednesday.
Representing Korea’s trade-reliant industry players, KITA underscored the necessity for the United States to exclude Korean chips and pharmaceutical products from trade restrictions, arguing that local firms establish strong business ties with their U.S. partners and the exported items are not a threat to U.S. national security, the organization said.
The U.S. has imposed a series of item-specific tariffs on imported cars, auto parts and steel products.
KITA also expressed concern that the restrictions will shrink investment appetites for Korean manufactured chip materials and equipment. According to data from KITA, Korean firms are forecast to account on average for some 37 percent of semiconductor capital expenditures in the U.S. between 2024 and 2032.
The fear is that U.S. tariffs will ultimately increase production costs for American chips, as well.
“Korea has formed a mutually beneficial relationship with the U.S., but the unilateral tariff imposition — which does not consider the detailed situations each industry and company is in — will create huge side effects in the end,” said Cho Seong-dae, a senior researcher at KITA.
“We will make concerted efforts to alleviate the U.S. tariff measures by partnering with major interested parties.”