Jamieson Greer, USTR Representative [EPA Yonhap News]

The United States Trade Representative (USTR) announced the initiation of an investigation under Section 301 of the Trade Act on the 11th (local time), stating that South Korea has "evidence of structural overcapacity and production through large and persistent trade surpluses."

In the Federal Register notice regarding the Section 301 investigation, released on its homepage, the USTR assessed that South Korea maintains trade surpluses primarily through exports of "electronic equipment, automobiles and automobile parts, machinery, steel, and ships."

It further pointed out, "South Korea's trade surplus significantly expanded in 2024 to reach $52 billion, an increase from the $10 billion goods trade deficit in 2023."

Additionally, it stated, "South Korea's trade surplus in goods and services with the U.S. increased to $56 billion in 2024," and added that "the surplus in goods and services with the U.S. has been maintained at approximately $49 billion over the four quarters from the third quarter of 2024 to the second quarter of last year."

The USTR also mentioned, "The Korean government has also acknowledged the need to reduce production capacity in the petrochemical sector."

On the same day, the USTR announced the initiation of Section 301 investigations against 16 economic entities, including South Korea, citing 'unfair trade practices related to overcapacity' as the reason. Through the Federal Register, the USTR presented each country's overcapacity and the resulting trade surpluses with the U.S.