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| 2026-02-21 09:07:55
(News Focus) tariff ruling-experts
(News Focus) Experts expect U.S.' trade deals with S. Korea, others to remain in place despite tariff ruling
By Song Sang-ho
WASHINGTON, Feb. 20 (Yonhap) -- The United States' bilateral trade deals with South Korea and other partners are likely to remain in place despite a Supreme Court ruling against President Donald Trump's "reciprocal" tariffs, experts said Friday, advising the countries to take a "wait-and-see" approach until Washington's next policy step.
The high court ruled Friday against Trump's use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify the reciprocal tariffs and other IEEPA duties, prompting questions over the trade deals that the Trump administration has secured with the duties as a pivotal negotiating tool.
The Trump administration imposed reciprocal tariffs of 15 percent on South Korean products, down from 25 percent, in line with a bilateral deal under which Seoul has committed to investing US$350 billion in the United States, among other pledges, in return for the tariff cut.
"For now, these deals are likely to remain in place as the Trump administration explores alternative means to institute tariff measures," Tom Ramage, an economic policy analyst at the Korea Economic Institute of America, told Yonhap News Agency, noting that Trump still has alternative legal avenues to implement reciprocal duties.
"I don't see economic and trade deals with other countries losing weight under this ruling. In fact, I can see it being the case that the U.S. administration makes some form of retaliatory example out of countries that back out of deals."
Wendy Cutler, senior vice president at the Asia Society Policy Institute, struck a similar note.
"Our trading partners were well aware of the risks the president faced in using IEEPA as the basis for reciprocal and other tariffs. Nevertheless, they chose to conclude deals with Washington, convinced by Washington that other statutes would be utilized to keep the tariffs in place," Culter wrote in her commentary.
"Walking away from the deals announced in recent months does not seem to be in the cards for our partners. They know all too well that such a step could end up leaving them in a worse position with the White House."
Soon after the court decision, Trump announced a plan to impose an additional 10 percent global tariff and undertake other tariff measures under different legal provisions, including Section 122, 201 and 301 of the 1974 Trade Act and Section 338 of the 1930 Tariff Act.
In a Fox News interview, Treasury Secretary Scott Bessent called on "all countries" to honor trade agreements with the U.S., warning that there is a "draconian alternative."
Pointing to various legal tools that the Trump administration has at its disposal, Ramage underscored that the high court's ruling does not foreshadow an end to Trump's America First trade policy marked by his aggressive use of tariffs.
"Life is 10 percent what happens to you and 90 percent how you react to it. Korea, and other trading partners which have made significant deals under the auspices of the IEEPA tariffs, might do well to take a 'wait and see' approach as the U.S. administration huddles to figure out what its next moves are," he said.
"Right now, the ruling deals with the president's authority under IEEPA, rather than casting a judgement on tariffs as a whole. This by no means signals an end to the president's protectionist trade agenda."
Victor Cha, president of the geopolitics and foreign policy department and Korea chair at the Center for Strategic and International Studies, expected that if Trump seeks to maintain the invalidated tariffs through other means, it will inject uncertainty into the Seoul-Washington alliance for South Korean President Lee Jae Myung's administration.
"Lee could face domestic pressure to nix the (trade and investment) deal, including calls from the opposition to renegotiate the deal, but also calls from the hardcore base of his party to lower the total investment amount," he said in his analysis.
"For Lee, pulling back from the agreement could jeopardize other valued aspects of the agreement, including shipbuilding and nuclear submarines. For the United States, the tariffs were arguably an efficacious element in securing $350 billion in South Korean investment."
Cha stressed that Seoul and Washington will have to find a way to preserve valued elements of the agreement amid domestic and partisan reactions, with both administrations facing elections this year -- U.S. midterms and South Korean local elections -- that will be seen as a popular mandate of the governments' policies.
Rob Rapson, former acting U.S. ambassador to South Korea, anticipated a degree of uncertainty over a tariff refund issue and other matters in the wake of the court ruling.
"Those Korean companies that indeed paid reciprocal tariffs on products imported into the U.S. can queue up with many others in pursuing this matter through legal, legislative and other means," he said.
"The bottom line, though, is that any refunds will be a long time in the making. Trump certainly has no intention to make refunds even though it could be a political liability in November for him and Republicans to not," he added, referring to the midterm elections in November.
Rapson expressed confidence that South Korea will carefully choose a path forward that best addresses its priority interests in both short and long terms, noting that it might have gamed out various scenarios from a top court ruling and the Trump administration's likely responses.
Friday's ruling did not issue an order related to tariff refunds, but the decision could give rise to calls for refunds. Reuters reported, citing Penn Wharton Budget Model economists, that over $175 billion in U.S. tariff collections could have to be refunded in the event of a ruling against the emergency tariffs.
Commenting on the refund process, Ramage said that it could potentially take months or years, meaning there should not be an expectation for immediate refunds any time soon.
"It's true that this ruling opens potential pathways for tariff payers to seek rebates," he said. "Given that tariffs were paid by individual company importers, however, refunds will likely be more of an issue for the importers based in the United States, who will likely have to individually petition for redress in the lower courts."
On April 2, a day he dubbed "Liberation Day," Trump announced his reciprocal tariff plan, arguing that a lack of "reciprocity" in trade with trading partners and their trade barriers led to "large" and "persistent" trade deficits, which he said posed an "unusual" and "extraordinary" threat to U.S. national security and the economy.
Trump has leveraged the IEEPA tariffs for various purposes, including pressuring Mexico, Canada and China to help end the flow of fentanyl into the U.S. and securing trade deals with South Korea, Japan, the European Union and other partners, as well as curbing India's purchases of Russian oil.
Trump has been doubling down on his trade policy to reduce America's trade deficit, boost its domestic manufacturing and foreign investments, and increase federal revenue, ahead of the midterm elections, which are seen as a crucial gauge of public sentiment toward his administration.
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