Rebutting American President Donald Trump's statement that Korea's average tariffs are four times higher than those of the U.S., the government on March 5 said bilateral trade is mostly tariff-free. (iclickart) *[Unauthorized reproduction and redistribution of the above photo is strictly prohibited under copyright laws and regulations.]

By Lee Jihae

The government on March 5 rebutted U.S. President Donald Trump's allegation that Korea's tariffs on average are four times higher than those of the U.S., saying bilateral trade is mostly tariff-free.

The American leader on March 4 made his statement in a speech to Congress in Washington.

The government said his view could be based on Korea's tariffs on the average rate for most favored nations (MFNs), which is universally imposed on member states of the World Trade Organization (WTO) without discrimination toward specific countries.

Korea's MFN tariff rate as of 2023 was 13.4%, about four times that of the U.S. (3.3%). MFN tariffs are applied between WTO member states that lack free trade agreements (FTA).

"Our country's average MFN tariff rate is about 13.4%, but we've concluded FTAs with most countries," a government source said. "Goods imported from countries we have FTAs with face tariff rates lower than those of MFN."

Since the 2007 Korea-U.S. FTA is applied first, the real tariff rate on U.S. goods is under 1%. That on American industrial products is 0% and the average on U.S. imports was 0.79% as of last year, with the real rate lower if refunds are considered.

Most goods are imported and exported tariff-free with the exception of select American agricultural goods such as rice and oranges.

"In fact, both countries have hardly any tariffs between each other, so we need to discuss this more," National Security Adviser Shin Won-sik said on the issue. "I've confirmed the willingness of both sides to strive for a win-win result."

jihlee08@korea.kr