Korea secures equal terms in US tariff deal on semiconductors, pharma

Kim Yong-beom, presidential chief of staff for policy, speaks during a briefing at the presidential office in Yongsan District, Seoul, Thursday. Yonhap

The tariff deal between Korea and the United States will not place the semiconductor and pharmaceutical industries at a disadvantage compared to other countries, Korean and U.S. officials said Thursday.

The confirmation came after Seoul and Washington finalized an agreement to reduce the 25 percent “reciprocal” tariff to 15 percent, including on one of Korea’s key exports — automobiles.

“Future tariffs anticipated for semiconductors and pharmaceuticals will be set in a way that ensures Korea is not treated unfavorably compared to other countries,” Kim Yong-beom, presidential chief of staff for policy, said during a briefing at the presidential office in Seoul.

He said it has been clearly specified that Korea will receive most-favored-nation treatment in regards to possible item-specific tariffs on semiconductor or pharmaceutical products. This status means Korea must nominally receive equal trade advantages as the U.S.’ “most favored nation” in these sectors.

Kim emphasized that one notable aspect of the deal is the expansion of the two countries’ cooperation in the shipbuilding sector, as Korea will invest $150 billion in a project that will cover the entire shipbuilding ecosystem, from ship construction to equipment and components.

A further $200 billion investment fund will be created for sectors where Korea has strong competitiveness, such as semiconductors, nuclear power, batteries and biotechnology.

“Considering the sectors targeted to invest for this fund, it is highly likely that our companies will participate as strategic partners, making this a good opportunity for Korean firms interested in entering the U.S. market,” he said.

“To minimize risks associated with operating the fund, the U.S. government has committed to acquiring the outputs of the funded projects.”

Announcing the trade deal between Seoul and Washington on social media platform X (formerly Twitter), U.S. Secretary of Commerce Howard Lutnick stated that Korea “will also not be treated any worse than any other country on semiconductors and pharmaceuticals.” Meanwhile, he said, the tariff rate on steel, aluminum and copper, currently at 50 percent, will remain unchanged.

Highlighting Korea’s $350 billion investment, Lutnick noted that 90 percent of the profits will be “going to the American people.”

“South Korea also agreed to purchase $100 billion in LNG (liquefied natural gas) and other energy products from the United States over the next 3.5 years,” he wrote.