[News] Lutnick Reportedly Rules Out Chip Tariffs in U.S.–Korea Deal, Reversing Taiwan-Level Rate Expectations

Trump’s tariff push is jolting the semiconductor world, heightening uncertainty over global trade and competition. South Korea, deeply embedded in the global chip ecosystem, could be among the most affected by Washington’s next move. According to Chosun Ilbo, following the summit on the 29th between President Trump and South Korean President Lee Jae-myung — where the two leaders reached an agreement on tariff negotiations — U.S. Commerce Secretary Howard Lutnick later stated that “semiconductors are not part of this deal.”

Lutnick’s remarks, however, stand in contrast to the South Korean government’s statement that the U.S. had agreed to set semiconductor tariffs “at levels no less favorable than those applied to Taiwan, a key competitor,” the report notes. As ZDNet points out, the initial understanding was expected to significantly ease uncertainty surrounding exports from major Korean chipmakers — including Samsung Electronics and SK hynix — to the U.S. market.

Under the new agreement reached at the summit, the two countries will maintain reciprocal tariffs at 15% and lower tariffs on automobiles and auto parts to the same level. As ZDNet adds, the U.S. investment package includes a $200 billion cash investment and an additional $150 billion directed toward the shipbuilding industry.

The U.S. Department of Commerce is currently conducting investigations under Section 232 of the Trade Expansion Act, which authorizes the president to impose tariffs on imports deemed a threat to national security. As The Chosun Ilbo notes, Trump underscored the importance of strengthening domestic semiconductor production in August, saying that the U.S. “could impose tariffs of up to 100%.”

Semiconductors have long been one of South Korea’s key export items to the U.S. Citing data from the Korea International Trade Association, ZDNet notes that South Korea’s semiconductor exports to the U.S. totaled $10.6 billion last year, representing 7.5% of its overall chip exports.

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(Photo credit: Office of the President of the Republic of Korea)