Despite the Supreme Court's ruling, Korea must prepare for 'third-round' tariffs

Seoul should study cases such as Japan and other major economies that continue investing in the United States despite external variables and craft strategies that treat additional rounds of tariffs as a constant.

U.S. President Donald Trump, center, flanked by U.S. Secretary of Commerce Howard Lutnick, right, and U.S. Solicitor General D. John Sauer, holds a press briefing following the Supreme Court's ruling that Trump had exceeded his authority when he imposed tariffs at the White House in Washington on Feb. 20. [REUTERS/YONHAP]

On Friday, the U.S. Supreme Court ruled that the “reciprocal tariffs” imposed on various countries by U.S. President Donald Trump were unlawful. Because tariffs are taxes — and taxation authority lies with Congress — the court found it illegal to levy country-specific differential tariffs under the International Emergency Economic Powers Act. The decision has, for now, put the brakes on the Trump administration’s one-way pressure campaign, which used reciprocal tariffs as leverage to push major economies into investing in the United States.

But this ruling is hardly cause for celebration. If anything, uncertainty over present and future tariffs has grown. The Supreme Court took less issue with the tariffs themselves than with their legal basis. That leaves the strong possibility that the Trump administration will activate a “Plan B,” unveiling second- or third-round tariff measures. In fact, Trump has already announced a 15 percent “global tariff” under Section 122 of the Trade Act of 1974. Such tariffs can be imposed for up to 150 days, and the period can be extended if Congress approves.

Trump has also begun steps to apply country-specific tariffs. By invoking Section 301 of the same act, he has directed the Office of the United States Trade Representative (USTR) to investigate unfair trade practices. Depending on the USTR’s findings, individual tariffs may be further raised. Trump may also bring up product-specific duties. With the existing levies on automobiles (15 percent) and steel (50 percent), additional tariffs on Korea’s key export items would inevitably deliver a significant blow to our economy.

Korea’s tariff negotiations with Washington have become literally chaotic. Beyond snarled trade talks and shaken bilateral trust involving delays in legislation tied to investment in the United States, there is a notable difference in how the two sides wish to dismantle nontariff barriers, such as Seoul’s push for an online platform fairness law or further opening of agricultural and livestock markets.

In these circumstances, it would be risky to rely on the Supreme Court’s ruling and hastily scale back investment in the United States or attempt to revise existing agreements. Such moves could deepen U.S. distrust and lead to greater costs.

U.S. President Donald Trump, left, and U.S. Commerce Secretary Howard Lutnick attend a press conference regarding the Supreme Court's striking down of most of Trump's tariffs at the White House in Washington on Feb. 20. [EPA/YONHAP]

Instead, Seoul should study cases such as Japan and other major economies that continue investing in the United States despite external variables and craft strategies that treat additional rounds of tariffs as a constant. By closely monitoring U.S. policy moves and engaging in consultation, the government must devote its full efforts to minimizing the potential shock to Korean companies and the economy.

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.