U.S. President Donald Trump said on Mar. 30 (local time) that he would start reciprocal tariffs on all countries, prompting South Korean industries to brace for a new wave of trade pressure.
S. Korean exporters are already grappling with a 25% tariff on steel, aluminum and related products since Mar. 12, along with another 25% tariff on cars and auto parts set to take effect on Apr. 2. If the so-called reciprocal tariffs—estimated at around 20%—are added on top, industry officials warn that exports could effectively come to a standstill.
Last year, S. Korea exported $683.6 billion worth of goods, with $127.8 billion—18.7% of the total—headed to the United States. Since exports were responsible for more than 90% of S. Korea’s 2% GDP growth, outbound shipments to the U.S. alone effectively drove about one-sixth of the country’s economic expansion—a share now under serious threat.
Against this backdrop, The Chosun Daily on Mar. 31 spoke with South Korean trade and industry experts about the potential impact of the additional tariffs on the country’s top 10 export categories to the United States, including automobiles, general machinery and semiconductors.
The proposed reciprocal tariffs would be layered on top of existing duties on steel, aluminum, and soon-to-be-imposed levies on cars and auto parts, significantly raising costs for S. Korean manufacturers.
Tariffs have been stacking “like Lego blocks,” some warn, creating a level of protectionism that could make exporting virtually impossible. Since the Korea-U.S. Free Trade Agreement came into effect in 2012, most S. Korean exports to the United States have enjoyed duty-free access, which only deepens the potential shock of the new measures.
Industries such as auto parts and home appliances are among the most vulnerable. Many auto parts are already subject to tariffs as derivatives of steel and aluminum, and will soon face additional duties under the vehicle and auto parts categories. If reciprocal tariffs are added on top, total rates could easily exceed 50%. Home appliance makers face similar challenges, as their products often include components already hit by metal-related tariffs.
“Auto parts exports to the U.S. have grown on the back of the Korea-U.S. FTA, but the outlook has turned murky as more and more items fall under various tariff categories,” said Jang Sang-sik, head of the International Trade and Commerce Research Institute.
He added that major exporters like Samsung Electronics and LG Electronics, which manufacture goods both in S. Korea and Mexico, have already begun considering shifting some of their production to U.S. facilities.
The automobile sector, S. Korea’s largest export category, is expected to suffer steep losses. About half of all Korean car exports go to the U.S., and the combined impact of new tariffs could cost the industry well over 10 trillion won ($6.7 billion). GM Korea, which exported 84% of its production to the United States last year, could be forced to suspend shipments entirely, some warn.
The steel industry, already operating under a 25% tariff, fears that the additional reciprocal tariffs could push the effective rate up to 40–50%, making it virtually impossible for companies to continue exporting to the U.S.
The United States was South Korea’s top destination for steel exports last year, accounting for 13%, or $4.3 billion, of total overseas shipments—underscoring just how heavily the industry depends on the American market.
“If reciprocal tariffs are added, no country will be able to afford exporting to the U.S. at those levels,” one steel industry official said.
The secondary battery sector is also expected to take a hit in the short term, as most U.S.-based production plants are still under construction and companies remain heavily dependent on exports from Korea.
Still, some categories—such as semiconductors and petrochemical products—may be less affected. While they would face tariffs for the first time, these products are difficult to replace in the U.S. market and are not widely produced domestically. With just 7% of their total exports going to the U.S., and minimal local production, the impact is expected to be relatively limited.
