Lutnick: ‘100% tariff on semiconductors unless you invest in the US’… pressure on Korea and others

The United States again underscored that it could impose a 100% tariff on semiconductors from major producing countries such as South Korea.

According to Bloomberg on the 17th (local time), US Secretary of Commerce Howard Lutnick told reporters at the groundbreaking ceremony for a new plant by US chipmaker Micron near Syracuse, New York, the previous day: “Anyone who wants to make memory chips has two choices—pay a 100% tariff or produce in the United States.”

While Lutnick did not name any specific country or company, the comments are being interpreted as aimed at South Korea and Taiwan, given that they are major semiconductor producers.

The Donald Trump administration said in August last year it would impose a 100% tariff on all semiconductors entering the United States. It later postponed a full rollout of the tariff and shifted its approach toward reducing US reliance on semiconductor imports. In this context, it also disclosed conditions for “exemptions from semiconductor tariffs” when announcing the outcome of a trade deal with Taiwan the previous day.

Under the Trump administration’s plan, Taiwanese companies that add semiconductor production capacity in the United States will be exempt from tariffs on imports of up to 2.5 times their output while construction of the facilities is underway. Taiwanese firms that complete new semiconductor production facilities will also be allowed to import up to 1.5 times their new production capacity without paying tariffs.

Expectations are growing that these Taiwan-specific terms could serve as a benchmark in future semiconductor talks between South Korea and the United States. Last year, the two countries concluded a trade agreement to apply a 15% tariff to most Korean goods, but they did not finalize plans for semiconductor tariffs.

At the time, however, South Korea received a principled assurance that it would not be treated less favorably than Taiwan, a competitor.

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com