[Teheran-ro] Urgent Need to Pass the ‘Special Act on Investment in the U.S.’

The war between the United States of America (U.S.) and the Islamic Republic of Iran (Iran) is shaking the global order. Yet another source of instability remains: tariffs.
Even after the Supreme Court of the United States (SCOTUS) ruled that reciprocal tariffs were unlawful, President Donald Trump openly warned that if large-scale investment agreements with the U.S. were reversed on the grounds of the Court’s decision, he would resort to every possible means to retaliate harshly.
In reality, the Trump administration has many pretexts it could use to raise tariffs. Fortunately, our government has stated that it will proceed as planned with the Special Act on Investment in the U.S. to honor existing agreements between the two countries, focusing on not provoking the Trump administration.
However, it is frustrating that the Special Committee on Investment in the U.S., which is supposed to handle the Special Act on Investment in the U.S. in our National Assembly, is effectively in a state of paralysis.
The Special Act on Investment in the U.S. had been pending in the relevant standing committee for more than two months due to budget deliberations and the confirmation hearing for the Minister of the Ministry of Planning and Budget. After President Trump renewed his pressure, the National Assembly formed the Special Committee on Investment in the U.S. to move the bill forward. Yet the committee came to a halt when the opposition party boycotted in protest against the ruling party’s unilateral push to pass three judicial reform bills.
What would happen if the U.S. ultimately forces through tariff hikes? The most immediate concern is the damage to small and medium-sized enterprises (SMEs). Structurally, SMEs have very limited capacity to absorb higher tariff costs. Any increase in tariffs quickly translates into deteriorating profitability, job cuts, and even questions about their survival.
According to the government, if the average tariff rate on exports to the U.S. by our SMEs were to rise by just 5 percentage points, these companies would face an additional tariff burden of about 1.3 trillion won. This would be roughly 1.7 times higher than the approximately 750 billion won in extra costs that the semiconductor industry, our second-largest exporter to the U.S., would bear under the same 5 percentage point increase.
SMEs account for 99.9% of all companies in our country. They generate about 45% of total corporate sales and employ well over 19 million people. If exports to the U.S. by SMEs clustered in industrial complexes across the nation deteriorate, the resulting contraction in employment and consumption could easily freeze the entire economy.
Even before the Special Act on Investment in the U.S. is passed, the government is reviewing potential investment projects in advance to demonstrate its commitment to implementing the bilateral agreement. However, if the Special Act on Investment in the U.S. fails to clear the National Assembly, no other measure may be enough to shake off the label of “non-compliance with the agreement.” We must remember that this could ultimately provide the very justification for retaliation that President Trump has mentioned. The longer the passage of the special act is delayed, the more firmly tariff risks may become entrenched as a burden on businesses and regional economies. To minimize the damage to SMEs, it is now essential to pass the Special Act on Investment in the U.S. without further delay.
hjkim01@fnnews.com Reporter