WHAT CHANGES ARE BEING IMPLEMENTED UNDER THE U.S.-KOREA STRATEGIC TRADE AND INVESTMENT DEAL?
The U.S. Department of Commerce and the Office of the United States Trade Representative have formally implemented tariff modifications to the Harmonized Tariff Schedule of the United States to execute key tariff-related elements of the U.S.-Korea Strategic Trade and Investment Deal. While the underlying effective dates for the tariff changes begin on November 1, 2025, and November 14, 2025, depending on product classification, the official U.S. Trade Representative notice was issued and filed on December 3, 2025, and published in the Federal Register on December 4, 2025. This timing reflects the formal regulatory publication process and does not alter the retroactive effective dates established in the notice.
WHEN DO THE NEW TARIFF RULES TAKE EFFECT FOR AUTOS AND AUTO PARTS?
Automobiles and automobile parts that are products of South Korea entered for consumption, or withdrawn from a warehouse for consumption, on or after 12:01 a.m. Eastern Time on November 1, 2025, are subject to the modified tariff structure. If the applicable Column 1 duty rate under the HTSUS is less than 15 percent, the combined duty is adjusted to 15 percent ad valorem. If the Column 1 duty rate is 15 percent or higher, no additional duty is assessed under the modified Section 232 framework. These changes are reflected in newly created HTSUS headings 9903.94.60 through 9903.94.65, which govern both complete vehicles and qualifying auto parts.
WHEN DO THE RECIPROCAL AND TIMBER TARIFF MODIFICATIONS TAKE EFFECT?
For all other covered goods of South Korea, including products subject to country-specific reciprocal tariffs as well as timber, lumber, and their derivative products, the tariff modifications apply to entries made on or after 12:01 a.m. Eastern Time on November 14, 2025. Under this structure, goods with a Column 1 duty rate below 15 percent are adjusted so the combined duty equals 15 percent ad valorem. Goods with a Column 1 duty rate at or above 15 percent are assessed no additional duty. Timber, lumber, and derivative wood products are now governed under new HTSUS heading 9903.76.23, which standardizes their tariff treatment at 15 percent unless exempt under the United States-Korea Free Trade Agreement.
HOW ARE CIVIL AIRCRAFT AND AIRCRAFT PARTS TREATED UNDER THE NEW RULES?
Civil aircraft products of South Korea receive a full exemption from the modified reciprocal tariffs and Section 232 duties under this action. This exemption applies to all civil aircraft other than unmanned aircraft, as well as their engines, parts, components, subassemblies, and ground flight simulators that meet the criteria of General Note 6 of the HTSUS. These qualifying products are now administered under a new heading 9903.02.81, ensuring they are not subject to the additional reciprocal, aluminum, steel, or copper-based duties imposed on other industrial goods.
WHAT ARE THE FOREIGN TRADE ZONE IMPLICATIONS FOR AUTO AND PARTS IMPORTERS?
Passenger vehicles, light trucks, and qualifying automotive parts of South Korean origin that are admitted into a United States foreign trade zone on or after the Federal Register publication date must now be entered under privileged foreign status. This designation locks in the applicable tariff rate at the time of admission and requires full duty assessment upon entry for U.S. consumption. The rule disallows the use of Chapter 98 partial duty exemptions based on component value for these products, and it confirms that antidumping, countervailing, and any other applicable duties continue to apply in addition to the modified tariff structure.
HOW SHOULD IMPORTERS AND LOGISTICS TEAMS PREPARE FOR COMPLIANCE?
Importers moving South Korean-origin vehicles, automotive components, timber products, or regulated industrial goods should:
- Validate HTSUS classifications against the new Chapter 99 headings.
- Confirm the correct application of the 15 percent adjusted duty where required.
- Verify the foreign trade zone admission status for affected auto inventory and ensure that customs brokers and internal compliance teams are aligned on the civil aircraft exemption criteria, as these changes directly affect landed cost calculations, inventory strategy, foreign trade zone operations, and post-entry audit exposure for shipments already entered after the effective dates.
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