U.S. tariffs on industrial machinery such as tractors 15%… Korean exports affected by 23 billion dollars
The United States has revised its 232 tariff system for steel, aluminum, and copper derivatives. For some mobile industrial machinery, including forklifts, bulldozers, and tractors, the tariff rate will be lowered to 15% if a tariff agreement is reached with countries such as South Korea, and the impact on South Korea is estimated at approximately 23 billion dollars.
The U.S. government announced on 1 local time a proclamation revising the Section 232 tariffs on steel, aluminum, and copper derivatives under the Trade Expansion Act. The Ministry of Trade, Industry and Energy said it had received the announcement. The proclamation newly established the covered items and criteria for application.
Under the proclamation, for some mobile industrial machinery, including forklifts, bulldozers, and tractors, imported from countries that have concluded tariff agreements with the United States, the 232 tariff rate will be adjusted to 15%. For the same items imported from countries that have not concluded tariff agreements, the existing 25% tariff will remain in place. The items will be classified and applied as mobile industrial machinery and other equipment.
Some items, including agricultural equipment and air-conditioning equipment, will be subject to a 15% tariff regardless of whether a tariff agreement has been reached. This tariff adjustment will take effect on 6 month 8 in U.S. local time. The implementation period is set according to the validity period stipulated in the proclamation.
The requirement for using U.S.-made steel has also been eased. Previously, items using at least 95% U.S.-made steel were subject to a 10% reduced tariff, but the requirement has been lowered to 85%. This change makes it easier to meet the U.S.-made content standard.
Meanwhile, under the proclamation, certain items, including aluminum printing plates and steel racks that were previously not subject to 232 duties, are newly included and will be subject to a 25% tariff. The Ministry of Trade, Industry and Energy estimated that the value of exports to the United States expected to benefit from tariff reductions under this overhaul would be approximately 23 billion dollars. The government has been requesting reductions through U.S.-Korea consultations and other channels.
The countries eligible for tariff reductions are certain countries, including South Korea. Under the proclamation, the list of countries subject to the measures and the detailed classification of items are specified in the announcement. Companies and exporters should check the applicable items and effective date.