South Korea to Monitor U.S. AI Chip Tariffs as Trade Pressures Grow

TLDR

• South Korea will continue to track the newly announced U.S. tariffs on AI semiconductor chips.
• Industry Minister Kim Jung-kwan stated that the tariffs will not immediately affect Korean exports to U.S. data centers and startups.
• The South Korean government held a meeting with domestic semiconductor firms to assess the potential impact of the tariffs.
• The U.S. imposed a 25 percent tariff on select AI chips including Nvidia’s H200 and AMD’s MI325X processors.
• The White House cited national security concerns as the reason behind the new trade restrictions.
• South Korean companies expressed concern about the possibility of higher tariffs on a wider range of semiconductor products.

South Korea will continue monitoring the new U.S. chip tariffs to protect its semiconductor sector, said Industry Minister Kim Jung-kwan, who met with domestic industry representatives, as uncertainty rises following a White House order that imposed 25% duties on select AI semiconductors including Nvidia’s H200 and AMD’s MI325X processors.

South Korea Responds to U.S. AI Chip Tariffs

South Korea’s Ministry of Trade, Industry and Energy said Minister Kim held talks with local chipmakers on January 15. He assured them the new tariffs would not immediately affect exports linked to U.S. data centers and startups.

Kim stated, “We will closely monitor the situation and respond flexibly to minimize impact on our semiconductor exports and manufacturing.”

During the meeting, companies raised concerns over broader tariff threats outlined in a White House fact sheet. The document indicated that former President Donald Trump could raise tariffs on imported semiconductors.

The ministry acknowledged that such increases could create pressure and uncertainty in the industry’s investment and production decisions.

The U.S. action stems from a Section 232 investigation by the Department of Commerce. The probe determined that current semiconductor imports threaten national security.

The tariffs specifically apply to advanced AI chips and related production gear. These products are essential to the global semiconductor value chain.

The White House emphasized the need to rebuild U.S. production capacity. The new policy focuses on domestic manufacturing growth in chips and derivative products.

According to the statement, “Trump recognizes the importance of national security and economic resilience in semiconductor manufacturing and supply.”

U.S. Investigations and Tariff Escalation Risks

The Commerce Secretary recommended offset plans for companies investing in U.S.-based production. Those firms could receive favorable consideration during tariff implementation.

Trump’s administration previously warned about raising tariffs to 100% or higher on imported chips. Reports suggested possible hikes up to 300%.

The new 25% tariff is a direct result of last year’s national emergency order on trade imbalance. That directive laid the foundation for reciprocal global tariffs.

Officials warned the sector could face more duties if it doesn’t align with U.S. manufacturing goals. Companies constructing U.S. factories may be exempt.

South Korean chipmakers continue assessing the scope and potential consequences of this evolving U.S. trade policy. The ministry plans regular briefings.

SK Monitors Won Stability Amid $350B Investment Pledge

South Korea also reviewed concerns related to foreign exchange volatility. Finance Minister Koo Yun-cheol met with U.S. Treasury Secretary Scott Bessent.

The two agreed that a stable won is crucial for trade and investment plans. They addressed recent fluctuations and currency-related challenges.

Choi Ji-young, a senior finance official, confirmed that both countries shared concerns. The goal remains to maintain consistent economic fundamentals.

Bessent said the won’s weakness contradicts South Korea’s economic health. He reaffirmed that “excess volatility is not desirable.”

South Korea pledged a $350 billion investment package in the U.S. last year. The deal included annual payments and tariff relief conditions.

In October, Seoul and Washington finalized this multi-year agreement. It aimed to balance trade issues and promote bilateral manufacturing cooperation.

South Korea’s government is tracking both tariffs and currency factors. These actions aim to shield manufacturers from trade-related disruptions.

The ministry reaffirmed its commitment to industry engagement. Officials will keep collaborating with chipmakers as policies develop further.

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