South Korea challenges 12.5% US tariff on forced-labor grounds at USTR hearing

South Korea told Washington on Thursday that a 12.5 percent tariff the Office of the United States Trade Representative plans to impose on Korean goods under a Section 301 forced-labor investigation is unjustified.

Lee Seung-heon, a commercial attaché at the Korean Embassy's trade office in Washington, appeared at a USTR-hosted public hearing at the US International Trade Commission on Thursday and submitted Seoul's objections to the tariff measure USTR announced June 2. In his testimony, Lee raised concerns that the US tariff action may not adequately reflect the specific circumstances surrounding South Korea's imports of goods made with forced labor.

Lee also explained that South Korea has worked to address forced labor through domestic and international frameworks — including developing a K-ESG guide and promoting the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct — and that a joint fact sheet from last year's summit between the two countries' leaders confirmed Seoul's willingness to cooperate with Washington on the issue. He further stressed the South Korean government's position that the US measure is neither appropriate nor necessary.

Lee also argued that even if the US determines it must impose some level of tariffs on the countries under investigation, South Korea — having already reached a separate trade agreement with the Trump administration — should receive more favorable treatment. In response, USTR officials asked for a detailed explanation of South Korea's policies to eliminate imports of forced-labor goods and requested a timeline for specific measures and plans.

USTR launched the current Section 301 investigation as a replacement for the reciprocal tariffs that President Donald Trump imposed on virtually all US trading partners in February on emergency economic grounds, after a federal court ruled those tariffs unlawful.

Following the investigation, USTR announced Thursday that it plans to impose additional tariffs of either 10 percent or 12.5 percent on imports from 60 economies. South Korea was placed in the group of 46 economies subject to the 12.5 percent rate — those the US determined had failed both to adopt and to effectively enforce import bans on goods produced with forced labor.

The hearing was convened to allow objections to the investigation's findings, though it remains unclear whether the outcome could be reversed or modified as a result. Ahead of the hearing, the South Korean government and the Korea International Trade Association submitted written comments urging the US to reconsider the 12.5 percent additional tariff on Korean products as insufficiently grounded, and asking that, if a tariff is unavoidable, it be reduced to 10 percent.

USTR is also conducting a separate Section 301 investigation into "structural overproduction," for which a preliminary hearing was held Sunday.

Following the court ruling that struck down the reciprocal tariffs, the Trump administration began imposing a 10 percent so-called global tariff on all trading partners under Section 122 of the Trade Act. Because Section 122 tariffs can remain in place for a maximum of 150 days, many analysts expect the overproduction investigation results to be released before that period expires in late July, after which they would be combined with the forced-labor findings to establish new tariff rates for US trading partners.

South Korea agreed to a 15 percent tariff rate and concluded a new trade agreement with the United States last year amid Trump's reciprocal tariff campaign and subsequent trade negotiations.

The central question now is what tariff rate South Korea will ultimately face under the Section 301 investigations.

However, Industry Minister Kim Jung-kwan said that during a video call with US Commerce Secretary Howard Lutnick on June 3, Lutnick told him "not to worry" about concerns that South Korea's tariff rate could exceed 15 percent.