U.S. Commerce Secretary Howard Lutnick made clear this week that the Trump administration is preparing “targeted and carefully considered tariff policies” on imported semiconductors, with the scope potentially extending beyond chips themselves to end products such as laptops, gaming consoles, and data center servers. Facing a policy that could directly impact the two memory giants Samsung Electronics and SK Hynix, a South Korean presidential office official revealed on Friday (the 4th) that Seoul and Washington are currently in discussions on semiconductor investment issues and are working to prevent various negotiation tracks from becoming entangled with one another.
The presidential office official, responding to reporters’ questions, said that various issues exist between the two countries, and that these issues sometimes influence one another, with semiconductors being one of the investment-related topics currently under discussion. He emphasized: “We are working to prevent these issues from becoming entangled with each other.”
Lutnick said in a television interview on the 2nd: “If you’re not producing here, be prepared to pay a price to access the world’s largest market.” He also confirmed that the new policy will be tied to U.S. investment, with companies that establish production facilities in the United States expected to receive tariff exemptions, creating a framework of “manufacture in America, tax-free; produce overseas, pay tariffs.”
South Korea’s Bottom Line: Treatment No Worse Than Competitors
South Korea’s Minister of Trade, Industry and Energy Kim Jung-kwan, speaking in Washington after attending an event promoting U.S. corporate investment in South Korea, said the two countries are continuing consultations on semiconductor tariffs, proceeding on the principle that South Korean companies should not receive less favorable treatment than their competitors. He noted that the U.S. side has not yet informed South Korea of the timeline for announcing semiconductor tariffs, and specific measures remain to be clarified.
Kim pointed out that the U.S. side committed during tariff negotiations last October not to give South Korean semiconductors treatment inferior to that of competing countries, and both sides are continuing discussions in accordance with that spirit. The joint explanatory document released by South Korea and the U.S. last November also stated that South Korea’s semiconductor tariff treatment must not be worse than arrangements the U.S. reaches in the future with economies whose semiconductor trade volume is at least comparable to South Korea’s.
He emphasized that proceeding in accordance with the spirit of the joint explanatory document and the investment memorandum of understanding is the consistent position of both governments; this statement represents a reaffirmation of consultation principles under existing agreements, not an announcement of new tariff benefits.
$350 Billion Investment Agreement Becomes Key Leverage
Under the agreement reached by the two countries’ presidents last year, South Korea will invest $350 billion (approximately NT$11.1 trillion) in U.S. manufacturing. According to the agreement, the U.S. tariff rates applicable to South Korean chipmakers will be “no less favorable than the treatment enjoyed by other competitors with equal or greater chip trade volumes.”
On U.S. investment, Kim reiterated that South Korea’s first U.S. investment plan remains targeted for completion of relevant procedures within September, and is expected to be announced this month once domestic procedures progress. Tariff consultations and investment implementation are proceeding in parallel, but he did not disclose the final details of the first plan, nor confirm what specific chip tariff arrangements the investment would secure.
The South Korean government maintains a cautious stance on U.S. investment in the semiconductor sector. According to South Korean media reports, the shared view of the government and relevant industry players is that investment in the semiconductor sector cannot be determined solely through intergovernmental negotiations, because if South Korea invests in the U.S. semiconductor sector, the primary executing entities would necessarily be global semiconductor companies such as Samsung Electronics or SK Hynix.
Lutnick revealed in the interview that the policy has already produced significant results, with the United States currently holding approximately $1.2 trillion (approximately NT$38 trillion) in semiconductor production investment commitments. He further stated, “When we came in, the United States accounted for less than 2% of global semiconductor production. Now we’re heading toward 40%, and if Intel succeeds, we’ll be at 50% when we leave.”
Market observers believe these remarks indicate the U.S. intends to use tariff pressure to compel South Korea and other global semiconductor-dominant countries to increase investment in the United States.
South Korea’s presidential office, the Blue House, stated on the 3rd that the U.S. government is considering a new round of import semiconductor tariffs, but specific details have not been finalized. The South Korean government will closely monitor policy developments and maintain close communication with the U.S. side to seek to prevent adverse impacts on South Korean companies.
South Korean Companies’ Exposure: Production Concentrated at Home, Exemption Criteria Key
Samsung Electronics and SK Hynix have both planned or promoted investments in the United States, but their substantial production capacity remains concentrated in South Korea, meaning the final exemption criteria, applicable products, and domestic investment thresholds will directly affect both companies.
South Korea is home to the world’s largest memory chip manufacturers, and demand for these chips has surged as U.S. technology companies race to build AI infrastructure. If the U.S. expands the scope of chip tariffs, it could not only alter the production and export strategies of South Korean semiconductor companies but also drive up the costs of building AI data centers, servers, and electronic products in the United States.
U.S. media previously reported that possible policy directions include: expanding the scope of tariffs from semiconductors themselves to end products containing chips, covering laptops, gaming consoles, and data center servers; setting differentiated tariff rates and quotas for different countries; and applying country-specific guidelines to major semiconductor manufacturers.
National Security Talks Stall, Nuclear Submarine Plan Makes No Progress
Beyond the semiconductor tariff issue, the South Korean presidential office official also revealed that negotiations between Seoul and Washington on national security issues have made no progress, including South Korea’s proposal under last year’s agreement to build nuclear-powered submarines domestically. This underscores that the complexity of bilateral negotiations extends far beyond a single industry issue, and the interconnectedness and mutual constraints among various agenda items are precisely what the South Korean government is currently striving to avoid.
Separately, U.S. President Donald Trump publicly mentioned South Korea and Japan in remarks related to the Alaska election on the 3rd, touching on the Alaska liquefied natural gas (LNG) project. Observers noted that this indicates energy investment is also one of the levers the U.S. is using to pressure allies, with the scope of bilateral negotiations continuing to expand.
The South Korean government’s current strategy is to advance U.S. investment projects in the energy sector first to buy time and space, while holding the line on the semiconductor tariff issue with the bottom line of “treatment no worse than competitors.” Whether this dual-track strategy can achieve substantive results before the tariff policy Lutnick previewed is formally announced will be a key focus in the coming weeks.