ED Unilateral onslaught of tariffs

U.S. President Donald Trump speaks while C.C. Wei, right, chairman and CEO of Taiwan Semiconductor Manufacturing Co., and Commerce Secretary Howard Lutnick listen in the Roosevelt Room of the White House in Washington, March 3, 2025. (Pool via AP)

When a senior official opens with the phrase “you have two choices,” the instinctive response is a sense of coercion rather than partnership. That was precisely the tone struck by U.S. Commerce Secretary Howard Lutnick when addressing global semiconductor firms at the groundbreaking ceremony for Micron’s new plant in Syracuse, New York. “Everyone who wants to build memory has two choices,” he said. “They can pay a 100 percent tariff, or they can build in America.”

Korea has long understood that Washington’s tariff policy flows from an “America First” agenda aimed at reviving domestic manufacturing. Yet such blunt, almost threatening language from the U.S. commerce secretary starkly illustrates how unilaterally tariffs are now being wielded — even against countries that have stood alongside the United States for decades as close military and economic allies.

U.S. semiconductor tariffs on Korea were postponed after Seoul and Washington finalized details last November, under the broader tariff agreement reached in July. That deal reduced tariffs on Korean imports to 15 percent in exchange for an estimated $350 billion in Korean investment in the United States. At the time, there was a clear understanding that Korean semiconductors would not receive less favorable treatment than those of countries with larger semiconductor trade volumes, implicitly referring to Taiwan.

Recent developments have called that understanding into question. Taiwan has reportedly secured an exemption from semiconductor tariffs in return for massive new investments in the United States, and this exemption is now being used as leverage to pressure Korean firms such as Samsung Electronics and SK hynix to further expand their U.S. footprint. Under the U.S.-Taiwan tariff agreement reached last Friday, Taiwan committed to $250 billion in corporate investment in semiconductors, energy and other sectors, along with an additional $250 billion in government-backed credit guarantees. In return, Taiwan received a 15 percent tariff rate and zero tariffs on semiconductors. That package includes the already announced $100 billion investment by Taiwan Semiconductor Manufacturing Co. in 2025.

Lutnick was explicit about Washington’s intent, reportedly saying that the goal was to “bring at least 40 percent of Taiwan’s chip supply and production to the U.S.” and warning that tariffs could rise to 100 percent if production did not move to American soil. Such remarks make clear that tariffs are no longer a trade tool but a blunt instrument of industrial coercion.

Against this backdrop, it is not unreasonable to assume that similar demands may soon be directed at Samsung and SK hynix. Samsung has already invested $37 billion in the United States, while SK hynix’s U.S. investment stands at roughly $3.87 billion. Moreover, Samsung’s U.S. facility is a foundry plant, and SK hynix’s is focused on packaging, fueling speculation that Seoul may soon face pressure to construct memory fabrication plants in the United States.

Whether the commerce secretary’s threats ultimately materialize remains to be seen. But at a time when the Korean won is already under severe pressure against the U.S. dollar, exacerbated by the massive $350 billion investment pledge and Washington’s refusal to extend a currency swap line, an aggressive and unilateral tariff push targeting Korea’s most critical industry would be deeply counterproductive. Semiconductors are not merely another export item; they are the backbone of Korea’s economy and a pillar of its global competitiveness.

If Washington continues to frame its relationship with Seoul in transactional and coercive terms, it risks undermining the very alliance it claims to value. A resilient and globally competitive Korean semiconductor industry is not a threat to U.S. interests but a strategic asset in a shared effort to stabilize global supply chains and counter external risks.

Seoul must therefore make clear that a strong domestic production base and the productivity of Korean semiconductor firms are indispensable, not only to Korea’s growth, but also to the long-term health of bilateral trade and alliance relations. An alliance built on pressure and threats, rather than mutual respect and balance, will ultimately weaken both sides.