Government Submits Opinion on U.S. Section 301 Trade Act Probe, Outlining Position on Overcapacity and Forced Labor

As the United States of America (US) resumes pressure to impose tariffs under Section 301 of the Trade Act of 1974, following the invalidation of reciprocal tariffs, the South Korean government submitted an official opinion to the Office of the United States Trade Representative (USTR) on the 16th.
According to trade authorities, the Office of the United States Trade Representative (USTR) accepted written comments until the 15th (local time) and plans to hold public hearings starting on the 5th of next month. The government is reviewing whether to participate.
The government has been gathering input from industry and relevant ministries through the Public-Private Joint Task Force on U.S. Section 301. The Ministry of Foreign Affairs of the Republic of Korea, the Ministry of Employment and Labor (MOEL), the Korea Institute for Industrial Economics & Trade (KIET), the Korea International Trade Association (KITA), and major industry associations have taken part in the response.
This response comes after the US launched a Section 301 of the Trade Act of 1974 investigation on grounds of industrial overcapacity and forced labor. The US has begun an overcapacity probe targeting 16 countries, including the Republic of Korea (South Korea), and is simultaneously conducting a forced labor-related investigation covering 60 trading partners.
Scott Bessent, the US finance minister, recently heightened pressure by stating that "as early as early July, existing tariff levels could be reimposed." Because Section 301 of the Trade Act of 1974 allows tariffs to be imposed without an upper limit depending on the investigation’s outcome, it poses a significant trade risk.
In the meantime, the government has been refining its response arguments through the Public-Private Joint Task Force on U.S. Section 301. The Ministry of Foreign Affairs of the Republic of Korea, MOEL, KIET, KITA, and sector-specific associations have reviewed the impact on each industry and possible countermeasures.
Through the opinion letter, the government aims to ensure that the balance of benefits under the bilateral tariff agreement between the US and South Korea is not undermined, and that South Korean companies are not placed at a disadvantage in exporting to the US compared with competitors from other major countries.
In response to the overcapacity allegations, the government stressed that domestic manufacturing capacity utilization is at an appropriate level and that South Korea’s exports of capital goods contribute to US manufacturing. On the issue of forced labor, it outlined its response framework based on International Labour Organization (ILO) conventions and domestic law.
However, trade risks are mounting as the prolonged war in the Middle East adds another layer of uncertainty. Concerns over potential tariff measures are growing as the US government has expressed dissatisfaction with South Korea in connection with the conflict in the Middle East.
Even so, the government does not expect the war issue to immediately translate into tariff actions. Kim Jung-kwan, South Korea's Minister of Trade, Industry and Energy, said in a recent broadcast, "We are trying, as much as possible, to treat war-related issues and trade issues separately," adding, "The US–South Korea tariff agreement is based on mutual benefit, so we do not expect it to move in a direction that would undermine that."
aber@fnnews.com Park Ji-young Reporter