South Korea to Monitor Impact of New US Tariffs on AI Semiconductor Chips in 2026

• How Will US Tariffs Impact South Korea's Semiconductor Industry?
• What's Behind the US Push for Semiconductor Tariffs?
• Currency Stability Concerns Compound Trade Tensions
• How Are South Korean Chipmakers Responding?
• The Global Semiconductor Trade at a Crossroads
• What's Next for US-South Korea Tech Relations?
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In a MOVE that could reshape global semiconductor trade dynamics, South Korea has announced it will closely monitor the effects of newly imposed US tariffs targeting advanced AI chips. The tariffs, which include a 25% levy on specific AI processors like NVIDIA's H200 and AMD's MI325X, aim to bolster domestic semiconductor production in the US but have raised concerns about potential market disruptions. This development comes amid ongoing negotiations about a $350 billion investment commitment between the two nations and growing worries about currency stability affecting bilateral trade.

How Will US Tariffs Impact South Korea's Semiconductor Industry?

South Korea's Industry Minister Kim Jung-kwan met with domestic chipmakers on January 15, 2026 to assess the potential fallout from the US tariffs. While officials initially downplayed the immediate impact—noting exemptions for data center chips and US startup suppliers—industry representatives expressed concern about possible future escalations. A WHITE House fact sheet hinted at even higher tariffs (potentially reaching 200-300%) on imported semiconductors unless companies establish US manufacturing plants. The tariffs stem from a Section 232 investigation that deemed current import levels a national security threat, with Commerce Department recommendations prioritizing companies investing in American semiconductor supply chains.

What's Behind the US Push for Semiconductor Tariffs?

The TRUMP administration's latest tariffs continue a pattern of trade measures aimed at reshoring critical technology production. These aren't the first semiconductor tariffs—last summer saw threats of 100% duties, and April 2025 brought reciprocal global tariffs addressing trade imbalances. The administration frames this as essential for national security, citing vulnerabilities in depending on foreign-made advanced chips. Commerce Secretary's compensation plan suggests tariff relief for companies supporting US production, creating what analysts call a "carrot-and-stick" approach to rebuilding domestic semiconductor capacity.

Currency Stability Concerns Compound Trade Tensions

Beyond chips, South Korean officials are monitoring currency fluctuations that could affect the $350 billion investment deal. Recent won depreciation prompted discussions between US Treasury Secretary Scott Bessent and South Korean Finance Minister Koo Yun Cheol, who agreed stable exchange rates are crucial for bilateral economic cooperation. The won's volatility comes at a sensitive time—October 2025's investment agreement tied tariff reductions to South Korea's annual $200 billion cash payments to the US, making currency stability a key factor in maintaining the delicate trade balance.

How Are South Korean Chipmakers Responding?

Major South Korean semiconductor firms find themselves in a complex position. While current tariffs exempt many of their products, the threat of expanded duties looms large. Some companies might accelerate plans for US manufacturing facilities to qualify for tariff exemptions—a strategy that aligns with Washington's goals but could strain domestic production capacity in South Korea. Industry analysts suggest firms will likely pursue a dual strategy: lobbying against broader tariffs while preparing contingency plans for expanded US operations.

The Global Semiconductor Trade at a Crossroads

These developments signal a potential reshaping of global semiconductor supply chains. The US measures mirror similar moves by other nations to secure critical technology supplies, potentially leading to fragmented regional markets. For South Korea—home to giants like Samsung and SK Hynix—the challenge lies in navigating these protectionist currents while maintaining its position as a leading chip exporter. The coming months will test whether the $350 billion investment framework can provide enough stability to offset these trade tensions.

What's Next for US-South Korea Tech Relations?

Observers will watch several key indicators: whether the US expands tariff coverage, how South Korean firms adjust investment strategies, and if currency fluctuations affect the massive investment commitment. The semiconductor dispute also occurs against the backdrop of broader tech competition, particularly in AI hardware where both nations seek leadership. How this plays out could set precedents for how allied nations manage competing economic and security interests in critical technologies.

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What specific AI chips are affected by the new US tariffs?

The tariffs specifically target advanced AI processors including NVIDIA's H200 and AMD's MI325X, imposing a 25% duty on these imports.

How might the tariffs impact South Korea's semiconductor exports?

While current tariffs have limited immediate impact due to exemptions, potential future expansions could significantly affect South Korean chip exports, particularly if duties extend to broader semiconductor categories.

What is the $350 billion investment commitment between the US and South Korea?

This October 2025 agreement involves South Korea making annual $200 billion payments to the US in exchange for tariff reductions, forming part of broader economic cooperation framework.

Why is currency stability important in this trade relationship?

Won volatility could affect the value of South Korea's dollar-denominated payments under the investment agreement, making exchange rate stability crucial for maintaining the deal's balance.

How are South Korean semiconductor companies responding to the tariffs?

Firms are assessing options including potential expansion of US manufacturing to qualify for tariff exemptions while lobbying against broader duty expansions.