US Tariffs on South Korea Lack Economic Rationale, Says Think Tank Report

The vast majority of U.S. exports to South Korea are already tariff-free under a bilateral free trade agreement, according to a report by the Korea Economic Institute of America. The report, released on June 25, 2025, concludes that there is no compelling economic rationale for the Trump administration's reciprocal tariffs on South Korea. The tariffs, which were announced on April 2 and took effect on April 9, are estimated to have a negligible impact on U.S. exports to South Korea, with 95% of U.S. exports already being tariff-free.

Key Takeaways:

• The Korea Economic Institute of America's report estimates that 95% of U.S. exports to South Korea are already tariff-free under the bilateral free trade agreement.
• The remaining 5% of U.S. exports to South Korea are subject to tariffs, with most affecting a narrow range of agricultural products subject to quotas.
• By 2026, another 4% of U.S. exports to South Korea will have their tariffs eliminated.
• The report finds no compelling economic rationale for the Trump administration's reciprocal tariffs on South Korea, suggesting they are better understood as political tools rather than trade policy rooted in sound analysis.
• The report challenges the much higher figures cited by the Office of the U.S. Trade Representative and Department of Commerce, citing data from the Korea Customs Service and U.S. Department of Agriculture instead.
• South Korea and the U.S. have been in consultations to reach a wide-ranging deal over U.S. tariffs, South Korea's non-tariff barriers, and economic and industrial cooperation, with July 8 as the deadline for the suspension of reciprocal tariffs to end.

Statistics:

• 95% of U.S. exports to South Korea are tariff-free under the bilateral free trade agreement (Source: Korea Economic Institute of America Report).
• 5% of U.S. exports to South Korea are subject to tariffs, with most affecting a narrow range of agricultural products subject to quotas (Source: Korea Economic Institute of America Report).
• Effective weighted average tariff on U.S. imports from South Korea: 0.19-2.87% (Source: Korea Customs Service and U.S. Department of Agriculture).
• 4% of U.S. exports to South Korea will have their tariffs eliminated by 2026 (Source: Korea Economic Institute of America Report).

Sources:

• Korea Economic Institute of America, "Fairness and Reciprocity? Reconsidering Trump's Liberation Day Tariffs on South Korea" (2025).
• Yonhap News Agency, "Most US exports to South Korea already tariff-free, think tank report says" (2025).