South Korea Sees Limited Immediate Impact from US AI Chip Tariffs

Post by : Saif Nasser

South Korea has said that the new tariffs announced by the United States on certain advanced AI chips are unlikely to hit its companies hard in the short term. Yet, officials in Seoul are keeping a close watch on the situation, warning that future actions could have a bigger effect.

Trade Minister Yeo Han-koo explained that the first phase of US tariffs mainly targets high-performance chips made by Nvidia and AMD, which are used for artificial intelligence and advanced computing. South Korean companies mainly export memory chips, which are not included in the current tariff list. This means the immediate impact on South Korea’s semiconductor industry is expected to be limited.

Still, Minister Yeo cautioned that it is too early to be fully reassured. He noted there is uncertainty over whether the United States will expand the tariffs in a second phase, potentially covering more types of chips and related products. The South Korean government is working closely with local chipmakers to prepare for any changes and protect their interests.

The tariffs, signed into effect by US President Donald Trump, follow a nine-month investigation under national security rules. The White House has said the tariffs are narrowly focused and do not apply to chips used in US data centers, consumer electronics, industrial devices, or public sector applications.

However, stronger measures may come later. US Commerce Secretary Howard Lutnick warned that South Korean and Taiwanese companies that do not invest in manufacturing in the United States could face tariffs as high as 100 percent in the future. This suggests Washington is using trade rules to encourage companies to produce more chips domestically.

The new tariffs are part of a broader US strategy to strengthen domestic chip production and reduce dependence on foreign suppliers from countries like Taiwan. For South Korea, one of the world’s leading chip exporters, the situation is a delicate balance between short-term reassurance and long-term risks.

While the immediate effect may be small, South Korea remains cautious, knowing that any future expansion of US tariffs could have serious implications for its global semiconductor trade. The government is committed to monitoring the situation and supporting its chip industry through potential challenges.