South Korea’s president warned that US chip tariffs would primarily drive up American costs, as Asia’s semiconductor dominance limits Washington’s leverage.
Abstract:
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Lee says US chip tariffs would increase US costs, not damage Asian producers.
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Proposed duties might attain 100% with out new US manufacturing commitments.
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Korea and Taiwan dominate world chip provide, limiting tariff effectiveness.
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South Korea’s exports hit a document in 2025, led by semiconductors.
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Lee briefly reiterated expectations for a stronger received later this 12 months.
South Korean President Lee Jae-myung performed down the risk posed by proposed US tariffs on semiconductor imports, arguing that any transfer by Washington to impose steep duties would in the end increase costs for American shoppers reasonably than undermine Asian chipmakers.
Lee was responding to feedback from Howard Lutnick, who stated South Korean and Taiwanese semiconductor companies might face tariffs of as much as 100% until they considerably broaden manufacturing capability in the US. Lee stated such a coverage can be troublesome to implement with out main financial penalties, given the dominant place held by Asian producers within the world chip provide chain.
He famous that South Korean and Taiwanese firms account for an estimated 80–90% of key segments of the semiconductor market, which means the majority of any tariff burden would probably be handed instantly on to US costs. “Most of it’s prone to be mirrored in increased costs in the US,” Lee stated, including that tariffs at that scale would perform extra as an inflationary tax than an efficient industrial coverage instrument.
Lee additionally careworn that South Korea has safeguards embedded in its commerce settlement with the US designed to stop its chipmakers from being positioned at a aggressive drawback relative to friends in Taiwan or elsewhere. These mechanisms, he stated, would assist protect Korean companies from discriminatory therapy even when US commerce coverage turns extra aggressive.
The feedback come in opposition to the backdrop of a powerful export efficiency for South Korea. Whole exports reached a document $709.4bn in 2025, up 3.8% from the earlier 12 months, pushed largely by a surge in semiconductor demand linked to synthetic intelligence funding. Semiconductor shipments jumped 22% final 12 months, with complete chip exports reaching $173.4bn.
Whereas the US stays an essential vacation spot, chip exports to the American market accounted for simply 8% of the whole, with China the most important purchaser, adopted by Taiwan and Vietnam. The export combine highlights South Korea’s diversified demand base and limits the direct publicity of the sector to potential US tariff motion.
On the finish of his remarks, Lee also touched briefly on currency moves, reiterating official expectations that the received might strengthen towards the 1,400 per greenback degree within the coming months, whereas acknowledging that FX dynamics stay carefully tied to broader regional strikes — some extent mentioned in additional element in earlier feedback.
