US Commerce Secretary Howard Lutnick has issued a warning that memory chip manufacturers, including those from South Korea, could face 100% import tariffs unless they increase their production capacity within the United States. "All companies that want to produce memory chips face two choices: either pay a 100% tariff or manufacture in the US," Lutnick stated last Friday during the groundbreaking ceremony for Micron Technology's (MU.US) $100 billion manufacturing base. He further added that, under a new trade agreement reached with Taiwan, China, the potential tariffs could also apply to South Korean chipmakers. "This is industrial policy," Lutnick remarked, without specifically naming any companies.
Analysis suggests that the potential tariff mechanism previously proposed by the Trump administration during trade arrangements with Taiwan, China, is highly likely to be replicated and applied to South Korean semiconductor companies. The absence of clear, detailed rules for semiconductor clauses in the South Korea-US trade agreement remains a primary concern for both the South Korean government and its businesses. Although South Korea agreed to a 15% tariff rate on most goods exported to the US during last year's trade negotiations, the specific semiconductor terms have yet to be finalized.
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