Korea hit with highest tariff rates among US free trade partners

Industry Minister Ahn Duk-geun, right, speaks at the Korea Chamber of Commerce and Industry in Seoul, Thursday, during a meeting with businesspeople to discuss countermeasures against U.S. reciprocal tariffs. In the middle is Trade Minister Cheong In-kyo. Yonhap

Korea has been hit with the highest reciprocal tariff rate among the 20 countries that have free trade agreements (FTAs) with the United States.

With it clear that Seoul had failed to persuade Washington to impose lower tariffs on Korean products compared to those from major exporters like Japan and the European Union, concerns are growing over Korea's diplomatic approach and future trade negotiations with the U.S.

The White House announced on Wednesday (local time) that the U.S. will impose a 25 percent reciprocal tariff on Korea, while charging 24 percent on Japan and 20 percent on EU member states.

Although an earlier chart presented by U.S. President Donald Trump indicated that Korea's tariff rate would be 25 percent, the White House later corrected the figure, updating it to 26 percent in an executive order annex on its website.

The higher tariff on Korea apparently stems from Trump's claim that the country has effectively imposed 50 percent tariffs on U.S. products when accounting for exchange rates and nontariff barriers.

"Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners," the U.S. Trade Representative said on its website. "To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed."

Among U.S. free trade partners, Jordan, Nicaragua and Israel will face tariffs of 20 percent, 18 percent and 17 percent, respectively. Canada and Mexico, which are part of the U.S.-Mexico-Canada Agreement, are exempt from the newly announced tariffs.

The remaining U.S. FTA partners included in the reciprocal tariff plan will be subject to the baseline minimum of 10 percent.

Before the announcement, Korea had sought to convince the U.S. to impose lower tariffs on Korean products than on those from Japan and the EU to maintain price competitiveness in the American market. The government also stated last month that Industry Minister Ahn Duk-geun and Trade Minister Cheong In-kyo had explained to their U.S. counterparts that Trump had miscalculated Korea's tariff rate for American products.

Trump has claimed that Korea's average tariff is four times higher than that of the U.S., seemingly referencing Korea's most-favored nation (MFN) tariff rate of 13.4 percent — approximately four times higher than the U.S. average of 3.3 percent. However, MFN tariffs apply to trade between countries without a bilateral trade agreement, meaning Korea's actual tariffs on U.S. imports are nearly zero.

Despite these clarifications, the White House reiterated on Wednesday that Korea's tariff rate remains higher than that of the U.S.

In response, Seoul pledged to redouble its efforts to persuade Washington by sending additional high-ranking officials to the U.S.

However, amid the leadership vacuum following President Yoon Suk Yeol's suspension from duty, skepticism remains over whether the U.S. will reconsider its stance without a face-to-face meeting between Trump and his Korean counterpart.

"It is necessary to persuade Trump in person," said Kim Dae-jong, a professor of business administration at Sejong University. "The best way to resolve this issue is for the president to personally request lower tariffs."