Korea says U.S. tariff hike won't harm local companies

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Korea says U.S. tariff hike won't harm local companies

Published: 15 May. 2024, 17:17

SARAH CHEA
chea.sarah@joongang.co.kr

Yoon Jin-sik, right, chairman of the Korea International Trade Association, talks about the impact of the U.S. government's recent tariff hike on Chinese imports during a press conference in Washington on Tuesday. [YONHAP]

Korean businesses and related entities believe the Biden administration's recent announcement of steep tariff increases on Chinese products will have no negative impact on domestic companies.

"The U.S. new tariffs aren't disadvantageous to Korean companies," said Yoon Jin-sik, chairman of the Korea International Trade Association (KITA), during a press conference in Washington on Tuesday, right after the U.S. government's announcement of the new policy.

"We independently discussed it briefly and concluded that the tariffs won't bring any disadvantages to Korean companies," Yoon said. "But it remains to be seen how the situations will proceed."

Chung Chul, president of the Korea Economic Research Institute (KERI), said some believe the new tariffs may actually benefit Korea.

"The tariff hike certainly targets China, so industries expect it could offer some chances to Korean companies," Chung said on Tuesday. "But since U.S. policies change quickly based on protectionism and nationalism, Korea must be prepared."

The statements come amid concern that the tariff hike might impact Korean companies that are highly dependent on Chinese firms for materials, especially as the U.S. government pressures allies to raise tariffs on Chinese imports as well.

A four-year review of the 2018 tariff law released by the U.S. Trade Representative on the same day showed that duties on Chinese imports increased imports from Korea.

The report said the tariffs "led to a shift away from imports from China and to increased U.S. production combined with greater imports from a diversified set of sources such as Mexico, Korea, Malaysia and Taiwan for the advanced technology industries it analyzed, including computer equipment, electrical equipment, and semiconductors."

On Tuesday, U.S. President Joe Biden unveiled a fourfold tariff hike on $18 billion of Chinese clean-energy products, calling the move a way to "protect American manufacturers."

Under the plan, the tariffs for Chinese EVs will quadruple from 25 percent to 100 percent, while the tax on batteries will jump threefold from 7.5 percent to 25 percent.

Biden is also tripling import fees on Chinese steel and aluminum from 7.5 percent to 25 percent in a bid to establish "fair competition with China."

China immediately protested the U.S. decision, issuing a statement Tuesday urging the United States to correct its policies.

"The U.S. government's decision on raising tariffs violates President Biden's commitment to 'not seek to suppress and contain China's development,'" said a statement by China's Commerce Ministry.

"The United States should immediately correct its wrongdoing and remove the additional tariffs imposed on China."

BY SARAH CHEA [chea.sarah@joongang.co.kr]