Seoul: South Korea's industry minister announced that the U.S. government is anticipated to reveal the results of its investigation into alleged overproduction under Section 301 of the Trade Act by the end of this month. Minister of Trade, Industry and Energy Kim Jung-kwan made this statement during a forum organized by the Kwanhun Club, a journalists' association based in Seoul.
According to Yonhap News Agency, the U.S. government is currently investigating 16 economies, including South Korea, over claims of excess industrial capacity under the same trade law. The investigation is separate from another probe concerning forced labor, which recently resulted in a new set of tariffs on imports from 60 trading partners. Under this scheme, South Korea, along with Japan and Switzerland, is subjected to a 12.5 percent tariff.
Kim assured that both South Korea and the U.S. have come to an understanding that any tariffs resulting from the Section 301 investigation would not surpass 15 percent, aligning with the Seoul-Washington tariff agreement concluded last year. Last year, South Korea exported US$122.9 billion to the U.S. and imported $73.4 billion, making the U.S. its second-largest trading partner.
In a related development, the industry minister advocated for exempting companies in the proposed mega-special economic zones from the country's existing 52-hour workweek restriction. Kim argued that the current system should not hinder young people's willingness to work. However, Labor Minister Kim Young-hoon noted that major semiconductor companies have already achieved record profits operating under the existing workweek system.
In June, the South Korean government launched its "three mega projects" initiative aimed at transforming the nation's economy through significant investments in semiconductors, physical artificial intelligence (AI), and AI data centers. This initiative, which calls for a combined investment of 4,755 trillion won (US$3.16 trillion), includes plans to construct two memory chip fabrication plants by Samsung Electronics Co. and two semiconductor fabrication plants by SK hynix Inc. in Gwangju and the surrounding Jeolla provinces.