U.S. Tariffs on Korean Automobiles and Auto Parts Reduced to 15% Starting from the 1st of This Month

On November 26 local time, South Korea's ruling Democratic Party submitted the "Special Act on South Korea-U.S. Strategic Investment Management" to the National Assembly. The bill includes provisions for establishing a South Korea-U.S. strategic investment fund and a South Korea-U.S. strategic investment corporation to manage the fund. In accordance with a previous agreement between South Korea and the United States, U.S. tariffs on South Korean automobiles and auto parts have been reduced to 15% starting from the 1st of this month.

Kim Byeong-gi, the Democratic Party's floor leader, submitted the bill to the National Assembly that day. This is also a follow-up measure to implement the South Korea-U.S. "Strategic Investment Memorandum of Understanding" signed by the two countries on the 14th of this month.

South Korean President Lee Jae-myung held a press conference at the Yongsan Presidential Office in Seoul on the 14th of this month, announcing that South Korea and the U.S. had finalized a "Joint Fact Sheet" document outlining the results of their tariff and national security consultations.

According to the document released that day, the leaders of South Korea and the U.S. unanimously acknowledged the "Korea Strategic Trade and Investment Agreement" issued in July this year. They confirmed that the agreement includes a $150 billion South Korean investment in the U.S. shipbuilding sector, as well as an additional $200 billion investment in the U.S. committed under the "Strategic Investment Memorandum of Understanding." The document shows that for South Korean products exported to the U.S. with tariff rates already at or above 15%, the U.S. will not impose "additional tariffs." For products with tariff rates below 15%, the U.S. will raise the tariff to 15%. Furthermore, the U.S. has adjusted the tariffs imposed on South Korean automobiles, auto parts, timber, and other products under Section 232 of its Trade Expansion Act to 15%. According to the South Korea-U.S. consultation results, the 15% tariff will take effect from the 1st of the month in which South Korea submits the relevant bill to the National Assembly.