South Korea’s Lee plays down proposed US chip tariffs, warns of higher prices

SEOUL – South Korean President Lee Jae Myung said on Jan 21 that if Washington introduced

higher US tariffs on semiconductor imports,

it would likely boost US prices, playing down concerns about the proposed 100 per cent duty.

US Commerce Secretary Howard Lutnick has said that South Korean and Taiwanese chipmakers may face tariffs of up to 100 per cent unless they commit to increased production on American soil.

Mr Lee said that given South Korean and Taiwanese chipmakers’ dominance of the market, a 100 per cent US import duty would likely sharply raise prices for chip products in the United States.

“They have a monopoly of 80 per cent to 90 per cent... so most of it is likely to be passed on to US prices,” he told a news conference.

South Korea already has safeguards in place under a trade agreement with the US to ensure that its chipmakers would not be left at a disadvantage to Taiwanese or any other global competitors, Mr Lee said.

South Korea’s exports hit a record high of US$709.4 billion (S$910.7 billion) in 2025, up 3.8 per cent from 2024, as semiconductor shipments jumped 22 per cent on strong demand for artificial intelligence investments.

Chip exports to the US accounted for 8 per cent of the total US$173.4 billion semiconductor exports, while China remained the biggest market, followed by Taiwan and Vietnam.

Slumping won currency

Mr Lee also touched on the slumping won in his remarks, citing expectations by South Korean authorities that the currency would strengthen to around the 1,400 per dollar level in a month or two.

The President noted, however, that domestic policies alone would not be sufficient to stabilise foreign exchange markets, as it was somewhat correlated with weakness in the Japanese yen, adding that the won was faring comparably better.

North Korea talks

Mr Lee said he was pursuing diplomatic efforts to enable North Korea and the US to resume dialogue and that a pragmatic approach was needed to deal with Pyongyang, which was continuing to stockpile nuclear arms.

“There is a benefit to making the North stop making nuclear materials and not export nukes and stop developing ICBMs,” he said, referring to intercontinental ballistic missiles, adding it would be hard to imagine that North Korea would actually give up its nuclear weapons programme.

North Korea has so far snubbed outreach by Mr Lee and US President Donald Trump to resume dialogue. The talks have stalled since Mr Trump met North Korea’s leader Kim Jong Un in 2019, amid disagreement over lifting sanctions against Pyongyang and nuclear dismantlement. REUTERS