U.S. trade agreements with Japan and South Korea are encountering challenges as officials in both countries question the feasibility of proposed tariff-related commitments.
South Korea’s National Security Adviser Wi Sung-lac said the country is unable to meet a $350 billion investment pledge intended to reduce U.S. tariffs from 25% to 15%. Similarly, Japan’s $550 billion commitment as part of a trade deal remains under review, with officials indicating the terms may need adjustment.
The agreements are part of President Trump’s broader tariff strategy, which recently expanded to include duties on pharmaceuticals, heavy trucks, and furniture, with some tariffs reaching as high as 100% for certain imported goods. Exceptions are being considered for pharmaceutical companies that build manufacturing facilities in the U.S. or are covered under existing trade agreements.
The administration is also encouraging semiconductor manufacturers to produce a portion of their chips domestically, tying compliance to the imposition of tariffs on imported chips. These measures aim to reduce reliance on foreign supply while promoting domestic manufacturing.
Tariff revenue has been highlighted as a potential source of financial support for U.S. farmers, who have experienced short-term impacts from the duties. However, the effectiveness of such measures could be influenced by upcoming Supreme Court rulings on the legality of the tariffs.
Meanwhile, discussions continue between the U.S. and China on trade agreements involving aerospace and technology sectors, underscoring the central role tariffs are playing in shaping global trade relationships.
The evolving situation with Japan and South Korea illustrates the complexities of implementing tariff-based trade deals and the negotiation challenges countries face in balancing economic commitments with domestic constraints.
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