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Seoul prepares calm response after U.S. court blocks Trump's reciprocal tariffs

Published: 29 May. 2025, 19:34 Updated: 29 May. 2025, 19:35

U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington on April 2. [REUTERS/YONHAP]

A U.S. federal court has blocked a key trade policy from the Donald Trump administration, raising questions about the future of reciprocal tariffs and offering Seoul new leverage in ongoing negotiations with Washington.

The U.S. Court of International Trade on Wednesday invalidated the reciprocal tariffs announced by Trump on April 2, ruling that the measure exceeded presidential authority. The decision came in response to a lawsuit filed by a New York-based wine importer, four small- and medium-sized enterprises and 12 U.S. state governments including Oregon and New York.

Trump had argued that the U.S. trade deficit constituted a “national emergency” and invoked the International Emergency Economic Powers Act (IEEPA) to impose reciprocal tariffs of up to 25 percent on goods from 57 countries. A baseline 10 percent tariff on all imports took effect on April 5, while higher country-specific tariffs were scheduled to be imposed from July 8.

IEEPA, enacted in 1977, gives the president authority to regulate international economic transactions in response to an “unusual and extraordinary threat” originating abroad. Trump was the first president to use it as a basis for tariffs.

But the court ruled that the U.S. Constitution grants taxing authority exclusively to Congress, which cannot be overridden by a president’s emergency powers. The decision was unanimous among the three-judge panel, which included Timothy Reif, a Trump appointee in 2019.

The ruling is expected to have a direct impact on Korea, which has been subjected to a 25 percent reciprocal tariff — 10 percent in baseline duties and an additional 15 percent in country-specific measures.

Vehicles for export are parked at the Pyeongtaek Port car terminal in Pyeongtaek, Gyeonggi on April 29. [NEWS1]

“The trade court’s decision in a pair of lawsuits filed last month against the government applies to the 10 percent tariffs Trump imposed on all foreign products as well as the much higher levies applied to goods from several dozen nations,” said the Washington Post.

The court ordered the administration to issue a new executive order within 10 days, effectively canceling the 10 percent duty and blocking the imposition of the delayed country-specific tariffs.

However, product-specific tariffs — including the 25 percent duties on autos, steel and aluminum — remain in place. These measures were implemented under different authorities: Section 232 of the Trade Expansion Act for national security concerns and Section 301 of the Trade Act for unfair trade practices.

Reuters noted that “the court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminum, using a different statute.”

U.S. President Donald Trump gestures as he departs after hosting the 2025 NCAA champion, the University of Florida men's basketball team, in the East Room of the White House in Washington on May 21. [AP/YONHAP]

For Korea, which is currently engaged in tariff negotiations with the United States, the decision provides critical breathing room.

“Given the ruling, the July 8 deadline for reciprocal tariff talks becomes irrelevant,” said Jang Sang-sik, director of international trade at the Korea International Trade Association. “This offers Seoul more time to assess its negotiating strategy, which was constrained by the upcoming Korean presidential election timeline.”

“With Trump’s flagship trade tool effectively neutralized, Korea has more space to assert its interests in future negotiations,” said another trade expert.

The ruling also casts doubt on the Trump administration’s plans to expand tariffs to new sectors such as semiconductors and pharmaceuticals. The court’s intervention, along with the economic fallout from inflation and other side effects of the tariffs, has likely weakened momentum for further expansion.

U.S. President Donald Trump boards Air Force One as he departs for Washington at Morristown Municipal Airport in Morristown, New Jersey, on May 25. [REUTERS/YONHAP]

Legal challenges to the remaining product-specific tariffs could also emerge, targeting the use of Section 232 and other authorities.

Still, the Trump administration is pushing back. Legal counsel for the administration has already filed an appeal and is considering an emergency motion to stay the ruling. The appeal will be heard by the U.S. Court of Appeals for the Federal Circuit, with a final decision likely to be handed down by the U.S. Supreme Court.

“This case is likely to proceed faster than typical litigation due to its urgency,” said Lee Jae-min, a law professor at Seoul National University. “A Supreme Court ruling could be delivered within one to two months.”

Yet the ultimate outcome remains uncertain. Heo Yoon, professor at Sogang University’s Graduate School of International Studies, noted that “over the past 30 to 40 years, U.S. presidential authority in trade has steadily expanded, and there is considerable precedent deferring to the executive branch.”

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]

Park Sung-hoon, professor emeritus at Korea University’s Graduate School of International Studies, warned that uncertainty has grown. “Given Trump’s history, he may find new avenues to pursue his tariff agenda,” he said.

“There’s a chance the court grants the administration’s request for a stay,” said a senior Korean trade official, adding that the government is closely monitoring developments. “We must also wait for the appellate court’s ruling. Tariffs on key items like cars and steel are still in place.

“We will respond calmly, keeping a close watch on the situation.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM WON [[email protected]]