Trump Targets South Korean Semiconductors with New Tariffs Pushing Tech Giants to Accelerate US Manufacturing Investments

South Korea's semiconductor industry faces mounting pressure as the Trump administration escalates tariff threats and reshapes U.S. trade relationships. On Wednesday, President Trump issued a proclamation imposing additional tariffs of up to 25 percent on certain high-performance AI semiconductors on national security grounds. The move targets advanced chips like Nvidia's H200 and AMD's MI325X used in critical infrastructure sectors including data centers, defense, and communications. The timing created immediate alarm in Seoul. On Thursday, the South Korean government convened emergency meetings with Samsung Electronics and SK hynix, the country's two largest chipmakers and key suppliers of high-bandwidth memory to Nvidia and AMD. Trade Minister Yeo Han-koo extended his stay in Washington to assess the situation while the Ministry of Trade, Industry and Energy held emergency task force meetings. The pressure intensified when Washington finalized a trade agreement with Taiwan just hours later. Under that deal, mutual tariff rates were lowered from 20 percent to 15 percent, matching the level South Korea secured in November. But Taiwan's agreement included something more valuable: direct tariff exemptions tied to semiconductor production in the United States. During construction of new plants, Taiwanese companies can import chips tariff-free at volumes up to 2.5 times installed capacity. After completion, that allowance drops to 1.5 times capacity. This structure directly links tariff benefits to U.S. manufacturing investment, a framework that South Korea's earlier agreement did not explicitly guarantee. While South Korea negotiated a most-favored-nation clause ensuring it won't face worse treatment than Taiwan, the agreement lacks the specific exemptions and volume-based guarantees Taiwan secured. South Korea's semiconductor exports to the United States reached 10.6 billion dollars in 2024, ranking third among all exports. The country's two major foundries now sit at the center of Washington's evolving strategy. Samsung Electronics is nearing completion of a 37 billion dollar foundry plant in Taylor, Texas, while SK hynix is building an advanced semiconductor packaging facility in West Lafayette, Indiana with 3.87 billion dollars in investment. Experts say Trump's tariffs reflect a clear industrial strategy: producing semiconductors in the United States. The proclamation signals that broader tariffs could follow, with the White House warning it may impose additional duties on semiconductor imports while offering tariff offset programs for companies investing in domestic supply chains. For South Korea, the message is unmistakable. Investment in U.S. production appears to be becoming the price of tariff relief, testing both the durability of last year's most-favored-nation promise and the limits of the country's export-driven semiconductor industry. Thank you for tuning in to South Korea Tariff News and Tracker. Please subscribe for the late This content was created in partnership and with the help of Artificial Intelligence AI.