South Korea will be treated as a most favored nation by the United States in terms of semiconductor exports under a bilateral tariff agreement, the trade minister said Thursday, noting that Korean firms will not be subject to 100 percent duties as announced by US President Donald Trump.
"If the US semiconductor tariff rate for MFNs is set at 15 percent, South Korea will also enjoy 15 percent tariffs regardless of the rate going up to 100 percent or 200 percent," Trade Minister Yeo Han-koo said in a radio interview with broadcaster SBS.
"In the trade deal, the US administration promised to grant us MFN status when imposing tariffs on the semiconductor and bio sectors in the future," Yeo added.
Yeo's remarks came after Trump said his administration will impose a tariff of about 100 percent on semiconductor imports, which is expected to be officially announced in the coming weeks.
Asked whether Samsung Electronics Co. and SK hynix Inc., two major chip manufacturers in Korea, will not face 100 percent tariffs, Yeo answered, "Yes."
Industry and trade experts here expect Washington's tariff rate for chip imports from MFNs to be set at 15 percent as the US agreed to apply 15 percent duties on European products in a trade agreement with the European Union last week.
In a trade deal with Korea, the Trump administration did not specify how much tariff it will impose on Korean-made semiconductors, but agreed to grant Seoul the status of MFN in the sector.
Under the deal, the US lowered its reciprocal tariffs for Korea to 15 percent from the initially proposed 25 percent and also reduced the tariff rate for Korean cars to 15 percent from 25 percent.
In return, Seoul made a pledge to invest a combined US$350 billion in the US for cooperation in the shipbuilding, semiconductor, battery and other key industries, while promising to purchase $100 billion worth of American energy products.
Earlier in the day, US tech giant Apple Inc. said it is working with Samsung at the latter's foundry plant in Texas to develop a next-generation semiconductor, which will be used for iPhone devices. (Yonhap)
