Trump's trade barrier claims for automakers clash with Korea’s revised laws

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Trump's trade barrier claims for automakers clash with Korea’s revised laws

Published: 19 May. 2025, 17:36

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

U.S. President Donald Trump holds the 2025 National Trade Estimate Report on Foreign Trade Barriers by the Office of the United States Trade Representative during an event to announce new tariffs at the White House in Washington on April 2. [AP/YONHAP]

Korea has revised its emissions-related regulations for foreign car manufacturers in response to U.S. President Donald Trump’s criticism that they are a trade barrier.

Korea’s Ministry of Environment revised and implemented its Clean Air Conservation Act last July and added a list of “significant” auto components directly linked to emissions, requiring imported brands to obtain a modification certification upon replacement under the law’s enforcement rules.

Despite the update, the 2025 National Trade Estimate Report on Foreign Trade Barriers from the U.S. Trade Representative (USTR) report pinpoints the vagueness of the “significant” terminology when carmakers are “required to obtain either a modification certification [for a substantial modification of ERC] or prepare modification reports for insignificant changes.”

The same issue has been consistently raised in the USTR report for eight consecutive years since 2018.

“The USTR report does not appear to reflect our recent legal revisions,” an official from the Environment Ministry’s transportation environment division that handles the law told the Korea JoongAng Daily.

“We’ve already revised the relevant law in response to a range of feedback from foreign automakers and repeated concerns raised by the USTR’s report, and confirmed that imported manufacturers no longer experience confusion regarding this matter.”

Top: The U.S. National Trade Estimate Report on Foreign Trade Barriers states that Korea's law requires automakers to either gain modification certification for any replacement of auto components for significant changes related to emissions, but it does not have clear definitions on what is ″significant.″ Above: The Ministry of Environment's revised Paragraph 1, Article 67 of the Enforcement Rules of the Clean Air Conservation Act, implemented in July of last year, clearly states the list of ″significant″ components. [SCREEN CAPTURE]

Under Paragraph 1, Article 67 of the Enforcement Rules, several factors — such as engine displacement, ignition timing and the materials and control devices of the fuel tank related to evaporative emissions — are designated "significant." The rules also refer to Paragraph 2, Article 48 of the Clean Air Conservation Act, which states that if a modification of key components does not result in an increase in emissions, submission of the relevant documents shall be deemed sufficient for modification certification.

The revision would appear to negate Trump’s claim while presenting the USTR report as a “special book” that Korea imposes the “worst” nonmonetary restrictions that hinder U.S. automakers’ expansion in the local market.

Trump said “a friend is worse than the foe in terms of trade” during his announcement of 25 percent reciprocal tariffs against Korea at the White House on April 2, saying that “81 percent of the cars in South Korea are made in South Korea,” while General Motors and Ford sales are weak.

In fact, foreign car manufacturers say Korea’s law revision has resolved many of their previous concerns.

“We are of the view that conditions have notably improved, though the process demands a fair amount of administrative resources on both sides,” a source from an imported brand running business in Korea told the Korea JoongAng Daily.

Another source from a foreign marque also said, “The standards have become much clearer compared to the past, giving foreign automakers a strong sense of clarity and structure.”

Still, some argue that the law needs further clarification on details, such as narrowing down which major modifications are subject to the rules.

“It is now clear which components are considered key, but the threshold for modifications remains vague,” a source from a foreign auto brand said. “For example, if the same component is used but the manufacturer or production site changes, is that considered a major change? Due to this, many manufacturers have adopted the approach of just seeking certification even for minor alterations to avoid further conflict.”

Experts say that Trump’s mention of trade barriers is baseless and amounts to little more than a gesture demanding that other countries pay more to the United States.

“It’s nitpicking. There can’t be trade barriers. As an export-driven country, Korea designs and revises its laws in accordance with international standards to avoid any potential disputes or complaints under World Trade Organization rules,” said Kim Pil-soo, a professor of automotive engineering at Daelim University College.

“If Korea really had unfair rules that hinder foreign automakers’ sales, how could German automakers like BMW and Mercedes-Benz be selling roughly 70,000 cars a year here?”

BY SARAH CHEA [[email protected]]