U.S. Pledges MFN Treatment to Korea in Key Sectors

The Presidential Office announced on Aug. 7 that Korea has secured a promise of Most Favored Nation (MFN) treatment from the United States, specifically in the semiconductor and pharmaceutical sectors. This development follows U.S. President Donald Trump's recent announcement of imposing a 100% tariff on imported semiconductors.

Implications of the MFN Treatment

Presidential Office spokesperson Kang Yu-jung highlighted the significance of the MFN treatment, stating, "Whether it’s 100% or 200%, receiving Most Favored Nation treatment allows us to take the U.S. promise at face value." This statement underscores the potential benefits for Korea's semiconductor and pharmaceutical industries amidst global trade tensions.

Trump's Tariff Announcement

President Trump's declaration at the White House on Aug. 6 introduced a 100% tariff on chips and semiconductors. However, exemptions were noted for companies investing in semiconductor production within the U.S., a move that could influence global trade dynamics and Korea's export strategy.

Impact on Korea's Semiconductor Industry

Semiconductors, accounting for about 20% of Korea's exports, stand as the country's top export item. The imposition of a 100% tariff could severely impact not only giants like Samsung Electronics and SK Hynix but also their supply chain partners, including material and equipment manufacturers.