Key Points
- South Korea says a new U.S. 25% tariff on select AI and advanced chips will have limited immediate impact, since most Korean exports, like memory chips, are not covered.
- Trade Minister Yeo cautioned that uncertainty remains if tariffs expand in later phases.
- Seoul plans to collaborate with industry to mitigate any broader effects and safeguard supply chain roles.
South Korea’s Trade Minister Yeo Han-koo said Washington’s newly announced 25% tariff on certain advanced computing chips will have limited immediate impact on the country’s semiconductor exporters because the levy currently targets a narrow group of high-end processors. Yeo noted that the tariff focuses on products like Nvidia’s H200 and AMD’s MI325X, which are not central to South Korea’s main export mix.
Seoul has welcomed the opportunity to assess the policy while noting that South Korea’s memory chips — the backbone of its semiconductor sector — are excluded from the first phase of duties, helping explain why the direct economic effects should be modest at this early stage. However, Yeo stressed that it remains too early to be fully reassured, as the White House has not ruled out expanding the tariff list later.
The tariff was part of a broader U.S. national security investigation under Section 232 of the Trade Expansion Act, aimed at reducing reliance on foreign semiconductor supplies, particularly in artificial intelligence and critical computing applications. U.S. Commerce officials have also warned that tariffs could rise significantly for companies that fail to invest sufficiently in domestic manufacturing.
South Korea’s government says it will work closely with industry to manage the potential longer-term effects and protect a sector that accounts for a major share of its exports. Officials are keeping a close eye on any second-phase actions that could broaden the scope of tariffs to include products where South Korean firms have greater exposure.
Industry voices say that tariff impacts will depend on how the United States interprets and applies the new rules, including which products and supply chain routes are covered. Analysts note that many chips used by U.S. technology companies go through third-country intermediaries, a factor that could complicate enforcement and affect how quickly exporters must adapt.
Beyond tariffs, South Korea remains engaged in diplomatic and commercial discussions with the United States and other partners to ensure its semiconductor sector navigates evolving trade policy. Government and industry sectors are expected to monitor negotiations closely as Washington balances industrial policy goals with global supply chain ties.
