Korea bets on swift legislative action to head off US tariffs threat

Industry Minister Kim Jung-kwan speaks during a press briefing at the government complex in Sejong, Monday. Courtesy of Ministry of Trade, Industry and Resource

The government sees a clear window to avert a potential U.S. tariff increase, Industry Minister Kim Jung-kwan said Monday, adding that he expects the swift passage of a special bill to implement Korea’s investment package for the United States could persuade Washington to defer the hike.

The minister stressed that Seoul is prioritizing passage of the special bill, with bipartisan discussions underway and approval targeted for early March, as it views legislative delays as the key obstacle to easing the trade friction.

The National Assembly established a special committee to handle legislation for Seoul's investment commitment to the U.S. as part of the trade negotiations last year.

“The main cause (of the hike threat) is delays in passing the bill,” Kim said during a press briefing at Government Complex Sejong.

“If the special bill passes in March, we believe there is a high possibility that the tariff hike could be postponed or withdrawn, since U.S. President Donald Trump cited that issue as the main reason for the increase.”

Last month, Trump announced that he would raise tariffs to 25 percent on certain goods, including automobiles, from the previously agreed 15 percent, citing Korea’s stalled legislative procedures.

“Compared with Japan, the progress of our bill has been slower, while Japan is already pushing ahead with concrete projects and conducting negotiations without needing a new law, whereas Korea is in a situation where we must first enact legislation. I think the U.S. side has been somewhat disappointed by this,” Kim said.

Cabinet members attend a parliamentary plenary session at the National Assembly in Seoul, Monday. Yonhap

The minister noted that while uncertainties remain, recent bipartisan agreement between ruling and opposition parties to move the bill forward has been positively received by U.S. counterparts.

“I think it had some positive impact on delaying the formal publication process to increase tariffs,” he said.

Kim said that Seoul sees no direct link between the recent controversy over Coupang’s massive data breach and the tariff hike threat, pushing back against speculation that the probe into the e-commerce giant could affect Washington’s stance in ongoing trade talks.

Kim emphasized that the two issues are “separate matters,” even as political scrutiny of the company is expected to surface at an upcoming U.S. congressional hearing.

“When we work on something, once one issue comes up, people tend to try using it to solve other problems they already have. I think that’s how it started, and the situation (has become) one where various areas of dissatisfaction related to our country are being raised as issues,” he said.

The tariff threat comes amid growing uproar in Washington over Seoul’s handling of Coupang’s data breach case, accusing the investigation of discriminatorily targeting the U.S. company.

Stressing that the core issue in the trade talks remains tariffs rather than a dispute involving a single company, the minister said he had fully explained Korea’s position and clarified during a recent meeting with U.S. Commerce Secretary Howard Lutnick that the Coupang probe centers on a large-scale customer data breach.

“(I explained that) if an American company had potentially transferred personal information on 80 percent of its own legal-aged citizens overseas, I think the U.S. would have no choice but to respond,” he said.

“As far as I know, the U.S. is much stricter and tougher than Korea on such matters, so that is what we are focusing on in our explanations.”

Kim said the government is also preparing contingency plans in case the U.S. tariff increase proceeds, including scenarios tied to ongoing legal debates in the U.S. over tariff authority, while Seoul’s primary objective is to prevent the tariff increase from taking effect at all.

Regarding the possible projects for the investment package, the minister said Seoul and Washington are weighing “several options,” while energy, including nuclear power, remains a key area of discussion.

“The U.S., under President Trump, has expressed a strong intention to significantly expand its nuclear power market, and there are many new opportunities emerging in the global nuclear sector,” he said. “We will work to expand Korea’s export opportunities in the global market.”