EXPLAINER Why new US trade barrier report unconvincing from Korea’s perspective

Trade Minister Yeo Han-koo, left, talks with United States Trade Representative Jamieson Greer during the World Trade Organization's 14th Ministerial Conference in Cameroon, March 27. Courtesy of Ministry of Trade, Industry and Resources

The release of the 2026 National Trade Estimate (NTE) Report on Foreign Trade Barriers by the Office of the United States Trade Representative (USTR) on Tuesday did not appear to surprise the Korean government, given its subdued reaction to the annual publication.

Although this year’s report includes three more pages describing Korea’s trade environment compared to last year’s, government officials said they do not take it seriously.

The Ministry of Agriculture, Food and Rural Affairs regarded this year’s report as largely similar to previous editions in its references to agriculture-related issues. Once again, the U.S. questioned Korea’s imports of beef and horticultural products as well as its approval process for agricultural biotechnology products.

Newly added to this year’s report were concerns over Korea’s tariff-rate quota administration for soybeans and the suspended auction of U.S. table rice since November 2023.

The auction resumed in February after a two-year suspension that lasted through last December.

“The NTE report is more like a customary collection of complaints from U.S. companies,” Trade Minister Yeo Han-koo told reporters a day before its release. “It is unreasonable to interpret what is mentioned in the report as the U.S. government’s official stance.”

Still, the report includes additional points that Korea may find contentious, although the government has maintained a cautious approach, pledging to continue communication with the U.S.

One of the most notable new additions is the mention of alleged forced labor at Taepyung Salt Farm in Sinan County, South Jeolla Province. The issue led the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) to impose a Withhold Release Order (WRO) against Korean sea salt products, which has been in effect since April last year.

“These issues may artificially suppress labor costs, giving certain goods and services from and within Korea an unfair advantage,” the report read.

Last year, the Ministry of Oceans and Fisheries argued that exports from the farm to the U.S. were unrelated to forced labor, citing the government’s crackdown on labor exploitation revealed in 2021.

The ministry said the WRO was issued two years and five months after a Korean civic group filed a petition with CBP in November 2022.

“We have continued efforts to resume salt exports to the U.S.,” a ministry official said.

The latest NTE report also referenced Korea’s tariff rates applied to countries categorized as most-favored nations (MFNs), even though those rates have no direct relevance to the U.S.

In March last year, when U.S. President Donald Trump stated that Korea’s average tariff rate is four times higher than that of the U.S., the Ministry of Economy and Finance clarified that Korea’s average tariff rate on U.S. imports is nearly zero under the bilateral free trade agreement.

“While Korea’s MFN-applied tariff rate is approximately four times higher than the U.S. rate of 3.3 percent, this MFN rate differs from the preferential tariff rates that Korea applies to U.S. imports,” the ministry said at the time.

The report’s mention of complaints by U.S. cloud service providers about being excluded from Korean government procurements for artificial intelligence (AI) infrastructure has also been deemed groundless.

Last year, Korea allowed Amazon Web Services to take part in the project to establish a national AI computing center. Other AI projects led by the government this year are also open to foreign firms.

The Ministry of Science and ICT explained that the government excluded foreign companies from last year’s tenders for high-performance graphics processing unit chips and additional cloud resources only exceptionally, as the project was funded by an extra budget and connected to national security.

Meanwhile, the NTE report mentioned an amendment to Korea’s Trade Union and Labor Relations Adjustment Act, widely known as the “yellow envelope law,” for the first time this year. However, its reference to the pro-labor legislation has been interpreted as a neutral description of changes in Korea’s labor market.