South Korea’s President Lee Warns US Chip Tariffs Could Raise Prices

Post by : Saif Nasser

South Korean President Lee Jae Myung has played down fears over proposed United States tariffs on imported semiconductors, while warning that such measures could end up hurting American consumers through higher prices. Speaking at a news conference in Seoul, Lee said that heavy duties on foreign-made chips would likely raise costs across the U.S. economy rather than weaken Asian chipmakers.

The comments came after U.S. Commerce Secretary Howard Lutnick said that chip producers from South Korea and Taiwan could face import tariffs of up to 100% unless they expand manufacturing operations inside the United States. The proposal has raised concerns across the global technology industry, as South Korea and Taiwan dominate the semiconductor market.

President Lee explained that South Korean and Taiwanese companies together control around 80% to 90% of the global chip supply. Because of this dominance, he said, any large tariff would most likely be passed on to buyers in the form of higher prices. In simple terms, American companies and consumers would end up paying more for electronic products that rely on these chips.

Lee also said South Korea is protected by trade safeguards already included in its agreement with the United States. These measures are designed to ensure that Korean chipmakers are not treated unfairly compared to competitors from other countries. He added that Seoul would closely monitor developments but did not see an immediate threat to the industry.

South Korea’s semiconductor sector remains a key driver of its economy. The country recorded a record $709.4 billion in exports in 2025, an increase of nearly 4% from the previous year. Semiconductor exports rose sharply by 22%, largely due to strong global demand for artificial intelligence technology. Chips shipped to the United States made up about 8% of South Korea’s total semiconductor exports, while China remained the largest buyer, followed by Taiwan and Vietnam.

President Lee also addressed concerns about the weak South Korean won. He said authorities expect the currency to strengthen toward the 1,400 won per U.S. dollar level in the coming months. However, he admitted that domestic policy alone cannot fully stabilize currency markets. He noted that the won’s movement is partly linked to the Japanese yen and said South Korea’s currency has performed relatively better than some regional peers.

Beyond economic issues, Lee spoke about efforts to restart talks between the United States and North Korea. He said his government is working through diplomatic channels to encourage dialogue, while taking a realistic approach to Pyongyang’s nuclear ambitions. Lee said it would be difficult to expect North Korea to fully give up its nuclear weapons, but stopping further production and exports of nuclear materials would still be a meaningful step.

So far, North Korea has rejected outreach efforts from both Lee and U.S. President Donald Trump. Talks have remained stalled since Trump’s meetings with North Korean leader Kim Jong Un in 2019 ended without agreement on sanctions relief and nuclear disarmament.

President Lee’s remarks reflect South Korea’s careful balancing act. While defending its vital semiconductor industry, Seoul is also seeking to maintain stable relations with Washington and manage long-standing security challenges on the Korean Peninsula. As global competition over chip production grows, the debate over tariffs is likely to remain a key issue for both governments.