Lee says US tariffs on Korean chips would hit American consumers

President Lee Jae Myung said Wednesday that Seoul does not take Washington’s recent threat to impose a 100 percent tariff on semiconductors seriously.

Describing the move as a typical attempt to gain leverage in trade talks, he said the government will respond to the issue based on standards and principles.

“As far as I know, Taiwan and Korea hold about 80 to 90 percent of the global semiconductor market, so a 100 percent tariff by the United States would ultimately raise its consumer prices by nearly the same margin,” Lee told reporters during a nationally televised New Year’s press conference. “Most of the tariffs would be passed on to U.S. commodity prices.”

Lee made the remarks as Samsung Electronics and SK hynix face U.S. President Donald Trump’s threat of steep tariffs on all memory chips, not only advanced ones already subject to the 25 percent duty.

Last week, U.S. Commerce Secretary Howard Lutnick urged global memory chip manufacturers to choose between paying a 100 percent tariff or building a new plant in his country.

Uncertainty has deepened after Taiwanese chipmakers won exemptions in return for massive investments in the U.S., with the Trump administration signaling its intent to pursue “separate agreements for separate countries” on semiconductor tariffs.

The tariff rate on Korean semiconductors remains undecided, though Seoul was assured that it would not be treated less favorably than other nations according to a joint fact sheet signed with Washington last November to lower U.S. tariffs on Korean goods from 25 percent to 15 percent in exchange for Korea’s $350 billion investment in the U.S.

During the press conference, Lee cited the joint fact sheet, saying it ensures “no less favorable” chip tariffs than Taiwan’s. Cheong Wa Dae also said Sunday that the government will hold talks with the U.S. to minimize the impacts on Korean companies, in line with that principle.

“We signed that agreement to prepare for this scenario,” Lee said. “Still, U.S. tariffs on Korea could be as unfavorable as those on Taiwan. I hope Taiwan can withstand U.S. pressure.”

Regarding the U.S. request to build memory chip plants on American soil, the president referred to the “commercial reasonableness” standard in the joint fact sheet as the basis for Korea’s decision. According to the document, the U.S. president shall select investments recommended by the investment committee, which intends to recommend only those it deems “commercially reasonable.”

“You don’t need to worry too much,” Lee said. “We will overcome these challenges because we have a capable industry minister and a strong negotiation team.”