The Korea International Trade Association announced Thursday that it had submitted an official opinion letter to the US Department of Commerce, outlining the Korean trade industry’s position in response to Washington’s investigation into potential tariffs on semiconductors and pharmaceuticals.
Last month, the US government launched a national security investigation under Section 232 of the Trade Expansion Act, targeting imports of semiconductors and pharmaceuticals. This law allows the president to impose tariffs or other restrictions if the imports are seen as a threat to national security.
The semiconductor-related investigation encompasses a wide range of products, including semiconductor substrates, bare wafers, legacy semiconductors, advanced semiconductors, microelectronics and parts for semiconductor manufacturing equipment.
On the pharmaceutical side, the probe covers finished drugs, active pharmaceutical ingredients, essential raw materials and medical countermeasures for public health emergencies, such as vaccines and antibiotics.
In its submission, KITA argued that Korean exports of semiconductors and pharmaceuticals do not threaten US national security and therefore should be excluded from any Section 232 measures.
The association noted that most Korean semiconductor exports to the US consist of general-purpose memory chips, while the US maintains a trade surplus with Korea by exporting high-value products such as semiconductor equipment.
In 2024, US exports of semiconductor equipment to Korea totaled $3.93 billion, representing 20.1 percent of the US’ global exports in that category. The trade balance in this sector showed a $2.9 billion surplus in favor of the US, KITA said.
The association projected that Korean companies would contribute 37 percent of total semiconductor facility investment in the US between 2024 and 2032, warning that if tariffs raise production costs or disrupt the stable supply of key materials and equipment, Korean firms may scale back their planned investments.
Additionally, KITA requested that tariffs not be imposed redundantly on products like semiconductor wafers and smartphones, which are already subject to scrutiny under a separate Section 232 investigation concerning critical minerals.
On the pharmaceutical front, KITA emphasized that Korean biopharmaceutical companies play a key role in enhancing access to affordable medicines in the US and in mitigating the risk of domestic drug shortages.
KITA highlighted active cooperation between Korean and American companies, including the production of finished drugs using US-sourced active pharmaceutical ingredients and contract manufacturing for American pharmaceutical firms.
“Uniform tariff measures that fail to account for the specific characteristics of products and companies could lead to serious unintended consequences,” said Cho Seong-dae, director of KITA's trade studies and cooperation team.
“We will continue to communicate the burdens these measures impose on Korean businesses and work closely with key stakeholders to mitigate the impact of any proposed tariffs.”
By Kim Hae-yeon (hykim@heraldcorp.com)
