Supreme Court Ruling Could Slash US Tariffs on Korean Exports Bringing Potential Zero Duty Shock to Trade Landscape

Listeners, welcome to “South Korea Tariff News and Tracker,” where we break down what today’s U.S. trade and tariff drama means for South Korea and for you. The big story is Washington. The U.S. Supreme Court is expected to rule any moment on whether President Donald Trump’s sweeping 2025 tariffs, imposed under the International Emergency Economic Powers Act, are legal. According to analysis from the Center for Strategic and International Studies and coverage in the Korea JoongAng Daily and Yonhap, this decision could instantly transform the tariff landscape for South Korea. Here’s the key number: under the current U.S.–Korea Trade and Investment Framework Agreement, most Korean goods entering the U.S. face about a 15 percent reciprocal tariff, down from the 25 percent level that Trump originally pushed through. CSIS and Korea JoongAng Daily both report that if the Supreme Court strikes down those IEEPA-based tariffs, duties on Korean exports to the U.S. could fall all the way to zero, at least temporarily. That would be a huge boost for Korean automakers like Hyundai and Kia, electronics giants such as Samsung and SK, and major players in chemicals, shipbuilding, and pharmaceuticals, which have all been paying elevated U.S. duties since early 2025. According to CSIS, Korean companies might also be able to claim refunds on tariffs paid since February 2025, as part of a broader pool of up to 150 billion dollars in potential refunds across all U.S. importers. Market analysts at AInvest note that removing a 25 percent U.S. tariff burden on South Korean autos and parts would significantly improve profit margins and could strengthen the Korean won and local equity markets. But there is a catch. Experts cited by the Korea JoongAng Daily warn that if the Court knocks out Trump’s IEEPA authority, the White House may try to keep pressure on partners like South Korea by pivoting to other, older tools such as Section 338 of the Tariff Act of 1930, which allows tariffs up to 50 percent against countries deemed to be engaging in “unreasonable” trade practices. No prior administration has used that authority, and any such move would likely trigger new court fights and prolonged uncertainty. For Seoul, this is not just about tariff rates. The Lee Jae Myung government pledged around 350 billion dollars of investment in the United States, along with concessions in areas like autos, digital trade, agriculture, and pharma, as part of the deal that brought the reciprocal tariff down to 15 percent. If U.S. tariffs suddenly drop to zero by court order, domestic critics may question why Korea should stick to those pledges, even as defense and shipbuilding cooperation with Washington remain strategically vital. Logistics firm Flexport reports that the U.S. has already reduced some tariffs on South Korea in sector-specific arrangements, and aviation trade between the two countries is effectively at zero-for-zero tariffs. However, the broader Trump tariff framework This content was created in partnership and with the help of Artificial Intelligence AI.