US Imposes 12.5% 'Forced Labor Tariff' on South Korea; Government Pushes to Maintain 15% Cap

The US has finalized imposing 10-12.5% 'forced labor tariffs' on major trading partners, including South Korea, under Section 301 of the Trade Act. Effective midnight on the 24th, the measure comes just before the previous 10% global tariff expires. South Korea will face at least 12.5% tariffs, though additional 301 clause tariffs for overproduction may apply. The government aims to ensure the combined tariffs do not exceed the existing US-South Korea trade agreement cap of 15%. The USTR explained the tariffs target countries failing to effectively enforce import bans on products made with forced labor. South Korea and Japan face combined tariffs of 12.5% if their most-favored-nation rates are below 12.5%, while 17 countries receive an additional 10% surcharge. The USTR defended the tariff caps as aligning with trade agreements and ensuring compliance with forced labor restrictions. Automotive, steel, semiconductors, and major raw materials under Section 232 are excluded. The Blue House pledges continued negotiations to uphold the 15% cap.