Full Breakdown
South Korea's President Lee Jae Myung Addresses Proposed U.S. Semiconductor Tariffs
1/21/2026, 6:37:09 AM
Concerns Over U.S. Tariffs on Semiconductor Imports
South Korean President Lee Jae Myung expressed concerns regarding the potential introduction of U.S. tariffs on semiconductor imports, which could reach as high as 100%. He stated that such tariffs would likely lead to increased prices for American consumers rather than adversely affecting South Korean and Taiwanese chipmakers. Lee emphasized that the dominance of these Asian manufacturers in the global semiconductor market—accounting for approximately 80-90% of key segments—would mean that any tariff burden would primarily be passed on to U.S. consumers.
U.S. Commerce Secretary Howard Lutnick indicated that these tariffs could be imposed unless South Korean and Taiwanese companies significantly increase their manufacturing capabilities in the United States. Lee countered this assertion by highlighting that South Korea has existing safeguards under its trade agreement with the U.S. to prevent its chipmakers from being placed at a competitive disadvantage compared to their Taiwanese and global counterparts.
Economic Context and Export Performance
In 2025, South Korea's exports reached a record high of $709.4 billion, marking a 3.8% increase from the previous year, driven largely by a 22% surge in semiconductor shipments. While the U.S. remains a significant market, chip exports to the U.S. constituted only 8% of the total semiconductor exports, with China being the largest market, followed by Taiwan and Vietnam. This diversified export base mitigates the direct impact of potential U.S. tariffs on South Korea's semiconductor sector.
Currency and Economic Stability
President Lee also addressed the recent depreciation of the South Korean won, projecting that it could strengthen to around 1,400 won per dollar in the coming months. He noted that while domestic policies are important, they alone may not stabilize foreign exchange markets, which are influenced by broader regional economic dynamics, including the performance of the Japanese yen.
Diplomatic Efforts Regarding North Korea
In addition to economic issues, Lee discussed ongoing diplomatic efforts to resume dialogue between North Korea and the U.S. He advocated for a pragmatic approach to address North Korea's nuclear ambitions, acknowledging the challenges in persuading Pyongyang to abandon its nuclear weapons program. Despite outreach efforts from both Lee and U.S. President Donald Trump, talks have stalled since 2019 due to disagreements over sanctions and nuclear disarmament.
Official Statements & Responses
Lee Jae Myung stated, “Most of it is likely to be reflected in higher prices in the United States,” regarding the impact of proposed tariffs. He also reiterated the importance of existing trade safeguards, asserting that they would help shield South Korean firms from potential discriminatory treatment.
Criticism & Opposition
Critics of the proposed tariffs argue that they could exacerbate inflation in the U.S. and undermine the competitiveness of American industries reliant on semiconductor imports. There are concerns that such measures could lead to retaliatory actions from South Korea and other affected nations, further complicating international trade relations.
What's Next
As discussions around U.S. tariffs continue, the South Korean government is expected to monitor the situation closely and engage in diplomatic efforts to mitigate potential economic impacts. The outcome of these tariff proposals will likely influence future trade negotiations and economic policies between the U.S. and South Korea.
