The Donald Trump administration in the United States announced a 7-page report on South Korea's trade barriers, ahead of imposing reciprocal tariffs.
The Office of the United States Trade Representative (USTR) stated in its National Trade Estimate (NTE) report released on the 31st (local time) that "expanding the market entry of U.S. automotive manufacturers into the South Korean automobile market remains a top priority for the United States."
USTR noted that the U.S. government has raised concerns regarding emission-related component regulations under South Korea's Air Quality Preservation Act, expressing worries that the automotive industry has faced a lack of transparency in the related regulations.
USTR also pointed out that while South Korean customs authorities can criminally prosecute companies for violating laws related to automobile imports, the customs do not have the authority to investigate vehicles manufactured in South Korea.
USTR mentioned that the pharmaceutical and medical device industries are raising concerns about a lack of transparency in South Korea's pricing and reimbursement policies, and stakeholders have limited opportunities to provide feedback on proposed policy changes put forward by the government.
USTR also raised concerns about the transparency of South Korea's Innovative Pharmaceutical Company (IPC) certification policy. While this policy allows specific corporations designated by the Ministry of Health and Welfare to receive tax credits, research and development support, and more favorable pricing, USTR added that it does not explain the reasons for denial of this certification to corporations.
USTR stated that the United States continues to urge South Korea to enhance transparency and provide meaningful opportunities for stakeholders to offer feedback, thereby improving engagement in the pharmaceutical and medical device industries.
Digital trade barriers include items such as network usage fees. The report claims that since some South Korean Internet Service Providers (ISPs) also supply content, the payment of expenses by U.S. content providers would favor Korean competitors. It also pointed out that imposing network usage fees strengthens the monopolization of South Korea's Internet service providers and is anti-competitive.
Regarding the online platform legislation, it was said that "it seems to apply to several major U.S. companies operating in the South Korean market and two South Korean corporations, but many other major South Korean corporations and companies from other countries are excluded." It also mentioned that South Korea's restrictions on the outflow of location-based data disadvantage foreign companies in competition.
It was noted that the amendment to the Personal Information Protection Act gives the South Korean Personal Information Protection Commission the authority to impose fines based on global revenue rather than revenue within South Korea and to prohibit the overseas transmission of personal data, which it stated creates a barrier to providing related services.
The report also highlighted that the Ministry of Trade, Industry and Energy prohibits the use of foreign cloud service providers regarding data protected by the Industrial Technology Protection Act.
The report went on to mention investment restrictions such as a ban on foreign investment in terrestrial broadcasting, restrictions on foreign ownership in cable and satellite broadcasting operators, and limitations on investment in wholesale meat businesses.
USTR must submit a report by March 31 every year detailing the trade barriers faced by U.S. exporters and the efforts of USTR to reduce these barriers. While the trade barriers identified by USTR in South Korea have been frequently raised in the past, this year's significance is heightened by President Trump’s announcement of plans to impose reciprocal tariffs corresponding to these barriers.
Meanwhile, the White House reaffirmed its position to announce country-specific reciprocal tariffs on April 2. White House Spokesperson Caroline Levitt met with reporters and noted that "other countries have exploited our country for too long," listing unfair trade examples like a 50% tariff on dairy products from the European Union (EU), a 700% tariff on rice from Japan, a 100% tariff on agricultural products from India, and a 300% tariff on butter and cheese from Canada.
She further stated, "For decades, these tariffs have made it virtually impossible for American products to be imported into these markets, causing many Americans to lose their jobs and businesses. So now is the time for reciprocity."