Tariff Changes Finalized Under the U.S.–Korea Free Trade Agreement

The United States and the Republic of Korea announced significant tariff adjustments tied to the Korea Strategic Trade and Investment Deal. These actions directly affect imports into the U.S. under the U.S.–Korea Free Trade Agreement (“KORUS FTA”) and upcoming modifications to the Harmonized Tariff Schedule.

Tariff Actions Impacting U.S. Imports

• Country-Specific Reciprocal Tariffs (Executive Order 14257)
  The U.S. will apply the higher of the following on Korean-origin goods:
• the U.S.–Korea Free Trade Agreement (“KORUS FTA”) rate,
• the U.S. Most Favored Nation (“MFN”) rate, or
• a 15% reciprocal tariff rate.

• Supplemental tariffs under Executive Order 14257 will be removed for:
• generic pharmaceuticals and related inputs,
• select natural resources unavailable in the U.S.,
• specified aircraft and aircraft parts under Executive Order 14257, Proclamation 9704, Proclamation 9705, and Proclamation 10962.

• Section 232 Tariff Adjustments
  • Automobiles and Auto Parts
    Total Section 232 tariff liability will be 15%. Rates at or above 15% under KORUS FTA or MFN will stand without an added charge; rates below 15% will receive an additional Section 232 tariff to reach 15%.
  • Timber, Lumber, and Wood Derivatives 
    A 15% Section 232 tariff applies to Korean-origin goods in this category.
  • Pharmaceuticals
    Any Section 232 tariff applied will be capped at 15%.
  • Semiconductors and Semiconductor Manufacturing Equipment: 
    Korea will receive tariff terms no less favorable than any future semiconductor agreement involving similar trade volumes.

• Effective Dates 

• Automobiles and Auto Parts
  • Applies to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on November 1, 2025.
• Country-Specific Reciprocal Tariffs, Timber/Lumber/Wood Derivatives, and Certain Aircraft/Parts
  • Applies to goods entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. ET on November 14, 2025.

Additional Cooperation Highlights (Non-Tariff)

Although not directly tariff-related, the agreement also includes:

• Removal of Korea’s 50,000-unit cap on U.S. Federal Motor Vehicle Safety Standards (“FMVSS”) compliant vehicles and simplified emissions documentation.
• Plans to address non-tariff barriers affecting agriculture, digital services, data transfers, and intellectual property.
• Joint enforcement efforts targeting duty evasion, labor and environmental compliance, and secure supply chains.
• Broader strategic cooperation in shipbuilding, defense, and nuclear programs, including more than $150 billion in Korean shipbuilding investment approved by the U.S. and an additional $200 billion expected under a forthcoming Memorandum of Understanding (“MOU”).

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