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U.S. think tank criticizes Trump's reciprocal tariff on Korea as 'political'

Published: 26 Jun. 2025, 14:18 Updated: 26 Jun. 2025, 17:48

U.S. President Donald Trump speaks during a tariff announcement in the Rose Garden of the White House in Washington on April 2. [EPA/YONHAP]

A U.S. think tank criticized the Donald Trump administration’s decision to impose a 25 percent tariff on Korean goods as a "reciprocal" measure, saying the move lacks economic rationale and appears politically motivated.

In a report published Wednesday, the Korea Economic Institute of America (KEI), based in Washington, said it found no compelling economic justification for the tariff.

"This report finds no compelling economic rationale for the Liberation-Day tariff rate on South Korea," the KEI said.

"This suggests that the tariffs are better understood as political tools rather than trade policy rooted in sound analysis."

U.S. President Donald Trump announced the tariff on April 2, designating the day "Liberation Day.”

The measure applied to all major U.S. trading partners, including Korea.

The tariff includes a base 10 percent levy and an additional 15 percent “reciprocal” tariff, totaling 25 percent. The Trump administration has deferred implementation for 90 days, until July 8.

Trump claimed that Korea imposes a 50 percent tariff — direct and indirect — on U.S. goods, citing this as justification for his own 25 percent tariff. However, the KEI’s analysis, using data from the Korea Customs Service and the U.S. Department of Agriculture, found that Korea’s effective average tariff on U.S. exports ranged between 0.19 and 2.87 percent in 2024.

The institute's findings directly challenge the "significantly" higher figures that the Office of the United States Trade Representative (USTR) and Department of Commerce cite, which "appear to be driven largely by the U.S. trade balance with South Korea," the KEI said.

The Korea Economic Institute of America, a think tank based in Washington D.C., published a report on the Donald Trump administration's tariff levied on Korea on June 25. [SCREEN CAPTURE]

The institute acknowledged lingering concerns over Korea’s nontariff barriers.

"There are areas of concern with potential for improvement," the report noted, suggesting that outstanding concerns should be resolved through established bilateral mechanisms under the Korea-U.S. FTA rather than unilateral action.

It specifically pointed to issues raised in the USTR’s 2025 National Trade Estimate Report, published March 31. These include Korea’s restrictions on importing U.S. beef from cattle over 30 months old and the country’s approval process for genetically modified organisms.

The KEI proposed that Washington and Seoul use existing frameworks under the FTA, such as its 21 committees and working groups, to resolve disputes.

"Our findings indicate that South Korea maintains one of the most equitable trade arrangements with the United States, particularly through its implementation of the KORUS FTA," the KEI wrote. "U.S.-South Korea economic relations have benefited both countries."

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY WI MOON-HEE [[email protected]]