This report evaluates the rationale and implications of President Donald Trump’s “Liberation Day” tariffs on South Korean imports. The administration frames these tariffs as “reciprocal” measures necessary to correct perceived imbalances in the U.S.-South Korea trade relationship. Given that the White House defines reciprocity by matching the tariffs and restrictions imposed by other countries on U.S. goods (i.e., discriminatory taxes, subsidies, burdensome regulatory requirements, exchange rate manipulation, wage suppression, and any other practices that would impose unfair limitations on market access or impedes fair competition), this report investigates whether the Trump administration’s claims about unfair South Korean trade practices are accurate.

Drawing on the latest trade data from the Korea Customs Service and tariff schedules from the U.S. Department of Agriculture, the report estimates that South Korea’s effective weighted average tariff on U.S. imports in 2024 ranged between 0.19 percent and 2.87 percent, with similar values for 2023. These findings directly challenge the significantly higher figures that the Office of the United States Trade Representative (USTR) and Department of Commerce cite, which appear to be driven largely by the U.S. trade balance with South Korea. Measured in trade value, 95 percent of goods exported from the United States to South Korea are tariff-free under the U.S.-Korea Free Trade Agreement (KORUS FTA), with most remaining tariffs affecting a narrow range of agricultural products subject to quotas. Of the remaining 5 percent, tariffs will be eliminated from another 4 percent of U.S. exports to South Korea by 2026.

The report also reviews non-tariff measures (NTMs), acknowledging their complexity and the absence of any standard, mutually agreed-upon metric for converting NTMs into tariff equivalents. Estimating their economic impact requires difficult and often unreliable methodologies such as business surveys, gravity models, and general equilibrium models, none of which yield robust or timely results. Nonetheless, we take note of the fact that there are bilateral (twenty-one committees and working groups under the KORUS FTA) and multilateral (WTO dispute settlement) mechanisms to address these issues more satisfactorily.

Ultimately, this report concludes that there is little need to change the U.S.-South Korea trade relationship. It recommends resolving outstanding concerns—especially those related to non-tariff measures—through established bilateral mechanisms under the bilateral FTA rather than unilateral action. Drawing from historical parallels to failed protectionist policies like the Smoot-Hawley Tariff Act of 1930, the report warns that these tariffs could undermine economic stability, raise prices for U.S. consumers, and damage the vital bilateral relationship.

In short, this report finds no compelling economic rationale for the Liberation-Day tariff rate on South Korea. This suggests that the tariffs are better understood as political tools rather than trade policy rooted in sound analysis.