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Cars await export in a lot near Pyeongtaek Port in March 19, 2025. (Yonhap)

The administration of US President Donald Trump has announced that non-tariff barriers to trade will factor into calculations of reciprocal tariffs. But is it overstating the non-tariff barriers that benefit South Korea? 

With the White House blaming such non-tariff barriers to trade for the US’ trade deficit with South Korea, a natural result of free trade, there’s growing concern in Korea that the Trump administration could make excessive demands in response to the trade deficit. 

“We’ve got persistent trade deficits with Europe and with China and South Korea that have been there for year after year after year,” Kevin Hassett, the director of the White House’s National Economic Council, said during an interview with CNBC on Monday. 

“If you look at why those trade deficits exist, it’s because they have non-tariff barriers and high tariffs that make it hard for US firms to compete,” he added. 

The US has its largest trade deficit with China and the second largest with the EU, with South Korea coming in eighth place. The fact that Hassett brought up Korea in the same breath as the EU and China backs up expectations that Korea will likely find itself subject to the reciprocal tariffs Trump is slated to announce on April 2. 

Not only do China and the EU not have free trade agreements with the US, but they are also currently engaged in a war of retributive tariffs with the US. When it comes to automobiles, a category that Trump has shown keen interest in, the EU levies a 10% on US vehicles — much higher than the 2.5% tariff that the US imposes on European vehicles.

Non-tariff barriers to trade appear to be the primary reason South Korea is roped together in the same category as China and the EU. During their meeting with Trade Minister Cheong In-kyo, who recently visited the US, Washington representatives mentioned that South Korea has a lot to revise when it comes to sanitation and quarantine measures against US agricultural products. 

The United States Trade Representative published its “2025 Trade Policy Agenda and 2024 Annual Report” on March 3. The report cites (1) impediments to US meat and poultry exports; (2) Korea’s approval process for genetically engineered products; (3) Korea’s positive list system for pesticides; (4) Korea’s administration of its tariff-rate quotas on agricultural products; (5) procurement of cloud computing services; and (6) Korea’s requirements for cross border transfer of data as issues addressed between the two nations. The US has also argued that Korea’s regulations on automobile emissions make it difficult for US cars to be exported to the Korean market. 

South Korean trade experts say that it’s unfair to blame non-tariff barriers for the trade deficit of US$55.7 billion the US recorded with South Korea last year. They argue that even if the barriers were removed, it would have a limited impact on the trade deficit. 

“Automobiles account for 60% of South Korea’s trade surplus with the US,” assessed Chang Sang-sik, the director of the Korea International Trade Association-affiliated Institute for International Trade. “The removal of tariffs according to the FTA, the decreased competitiveness of US cars, and the recovery of domestic consumption within the US are the key causes.” 

Because issues like agricultural quarantine and inspection measures and demands for transfers of map data to Google are matters related to public health and national security, some argue that it would be overly simplistic to call them non-tariff barriers to trade. The Trump administration itself cited security concerns when it began imposing tariffs of 25% on steel and aluminum products last week. 

When it comes to agricultural products, the US cattle industry is demanding that Korea drop its restrictions on beef from cattle aged more than 30 months, but Korea is already the largest importer of US beef and is the sixth-largest importer of US agricultural products on the whole. Korea has a deficit of US$890 million with the US on agricultural and food products.

By Lee Bon-young, Washington correspondent

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