Market Update: Korean economy faces uncertainty after U.S. Supreme Court axes Trump tariffs – Full Analysis

 

The U.S. Supreme Court on Friday
 halted President Donald Trump’s sweeping “reciprocal” tariffs, but Trump immediately responded by unveiling a new 15 percent global tariff and signaling further legally crafted trade measures, deepening uncertainty for Korea’s export-dependent economy.

 

“Please let this statement serve to represent that I, as President of the United States of America, will be, effective immediately, raising the 10 percent Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution [until I came along!], to the fully allowed, and legally tested, 15 percent level,” he wrote on Truth Social on Saturday.  

  


 

His comments came after the Supreme Court invalidated his reciprocal tariffs imposed under the International Emergency Economic Powers Act, after which he introduced a new temporary 10 percent global tariff under Section 122 of the 1974 Trade Act, only to raise it again to 15 percent. 

 

Trump also signaled his intent to maintain his high-intensity tariff policy. 

 

“During the next short number of months, the Trump Administration will determine and issue the new and legally permissible tariffs, which will continue our extraordinarily successful process of Making America Great Again,” he said.

  

Under a previous agreement with Washington, the United States reduced its reciprocal tariff rate on Korea from 25 percent to 15 percent, effective in November last year. However, Trump said on Jan. 26 that he would raise the tariff back to 25 percent, citing delays by the Korean government in advancing legislation related to special measures for the $350 billion investment in the United States agreed upon as part of the tariff deal last year.

U.S. President Donald Trump speaks during an event to announce new tariffs in the Rose Garden at the White House, on April 2, 2025 in Washington. [AP/YONHAP]

 

The court’s decision invalidated the 25 percent reciprocal tariffs, easing immediate pressure after Washington had threatened to restore Korea’s rate to that level. The newly announced 15 percent global tariff matches the level Seoul agreed to last year, limiting additional short-term strain on Korean exporters. 

  

The larger concern,
however, is whether Washington will shift to sector-specific tariffs to avoid further legal disputes. Korea’s key export products — namely semiconductors, automobiles and steel — fall within the potential scope of such measures.

  

“If the focus shifts to sector-specific tariffs, the damage could surpass that of reciprocal tariffs,” Joo Won, an economist at Hyundai Research Institute, said. 

  

Korea’s modest economic recovery since the second half of last year has relied largely on exports. The semiconductor supercycle has supported growth this year, pushing exports to $65.85 billion in January, up 33.9 percent from a year earlier.

  

On the back of stronger export performance, the government recently raised its economic growth forecast for this year to 2.0 percent. However, unexpected sector-specific tariffs could complicate efforts to meet that target.

  

“Companies have already adjusted to the newly applied system, and having to adapt again to a different system would itself be a burden,” Kim Kwang-seok, head of economic research at the Korea Institute for Industrial Economics & Trade, said. 

  

Industry officials also warned that the situation could become more complicated than last year’s initial round of tariff measures.

A 3D-printed miniature model of U.S. President Donald Trump, the Korean flag and the word ″Tariffs″ are seen in this illustration taken on July 23, 2025. [REUTERS/YONHAP]

  

Another variable involves Korea’s planned $350 billion investment in the United States. Seoul agreed to the investment as part of the reciprocal tariff arrangement last year, but the court ruling has undermined the legal basis of that framework. Some observers say the investment deal may now require reassessment.

  

Still, many experts say Seoul is unlikely to initiate renegotiation. Although the judiciary struck down the tariff measures, leadership in the U.S. executive branch remains unchanged. Korea’s investment plans also connect to broader strategic cooperation, including shipbuilding and nuclear-powered submarines.

  

“This began as an issue within the United States, so Korea should not rush into action,” a former trade official said. “We need to respond carefully and avoid triggering unnecessary friction with the Trump administration.”

  

Trade authorities also plan to proceed with investment plans as scheduled. 

 

Kim Jung-kwan, minister of Trade, Industry and Resources, confirmed at an emergency meeting on Saturday that the government would continue consultations with U.S. counterparts.

  

Just before the Supreme Court ruling, a working-level delegation led by Park Jung-sung, deputy minister for trade at the Ministry of Trade, Industry and Resources, visited Washington to meet officials at the Department of Commerce and other agencies to discuss investment cooperation.

  

The National Assembly’s special committee on investments in the United States also said it will hold a public hearing on related legislation on Tuesday and continue the legislative process without changes.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY JANG WON-SEOK [[email protected]]