After IEEPA: New Tariff Risks Korea Faces Following the U.S. Supreme Court's Section 301 Ruling
After the U.S. Supreme Court ruled IEEPA-based tariffs unlawful on February 20, 2026, the Trump administration immediately activated an alternative tariff framework using Trade Act Sections 301, 232, and 122. Concerns are growing that Korea could also become a target of new Section 301 investigations based on digital services taxes and industrial overcapacity.
Why You Should Read This Now: On the very day IEEPA tariffs were struck down as unconstitutional, the Trump administration pulled out Section 301 of the Trade Act as its new weapon. Korea already has a pending Section 301 petition related to Coupang, and two new crosshairs — digital services taxes and industrial overcapacity — are now aimed directly at Korea.
TL;DR
- 2026-02-20: The U.S. Supreme Court ruled IEEPA-based reciprocal and fentanyl tariffs unconstitutional
- 2026-02-24: The administration activated Section 122 (15%, 150 days) + accelerated Section 301 and Section 232 investigations
- USTR is maintaining existing Section 301 investigations targeting Brazil and China, and has announced plans to expand new investigations into industrial overcapacity, rice subsidies, and digital services taxes
- Korea already has a Section 301 petition related to Coupang pending, and its IT, semiconductor, and automotive exports may fall within the scope of new investigations
- The goal is to complete a new tariff framework within 150 days (approximately 5 months) — Korea has precious little time to respond
What Happened
On February 20, 2026, the U.S. Supreme Court ruled that the reciprocal tariffs and fentanyl tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) were unlawful, finding that they violated Congress's taxing authority.
Immediately after the ruling, USTR Ambassador Jamieson Greer issued a statement. The message was simple: "If IEEPA is blocked, we use other tools."
The administration deployed three alternative instruments:
| Legal Basis | Details | Effective Date |
|---|---|---|
| Trade Act Section 122 | Global 15% tariff, temporary for 150 days | Activated immediately on 2026-02-24 |
| Trade Act Section 301 | Unfair trade practice investigations → targeted tariffs | Existing investigations maintained · new investigations expanded |
| Trade Expansion Act Section 232 | Tariffs on items posing national security threats | Ongoing investigations accelerated |
Why Korea Is at Risk
1. A Section 301 Petition Already Open
The USTR website has a registered petition titled "Section 301 – Korea's Acts, Policies, and Practices Concerning Coupang." The core allegation is that Coupang discriminated against U.S. competitors in the Korean market. This investigation, which was previously a lower priority before the IEEPA ruling, may now resurface as a basis for building a new tariff framework.
2. Digital Services Tax Investigation Expansion
In an ABC interview on February 22, USTR Ambassador Greer stated that "countries imposing digital services taxes could also become subject to new investigations." Korea currently does not levy a digital services tax, but online platform regulations and App Store fee rules could be interpreted as "unfair practices" targeting U.S. big tech companies.
3. Industrial Overcapacity Investigations
Ambassador Greer announced new Section 301 investigations into industrial overcapacity that would "encompass many countries in Asia." Korea's semiconductor, steel, shipbuilding, and automotive industries could directly fall within the scope of such investigations.
The Amplification Mechanism: Why This News Matters Now
- 150-Day Countdown: Before the Section 122 15% tariff expires, the administration must finalize a permanent Section 301-based tariff framework. The five-month deadline compresses Korea's negotiating leverage.
- Simultaneous SBS and MBN Coverage: Major Korean broadcasters ran the headline "Will Korea Also Face Section 301 Investigation?" this morning.
- 25% Tariff Threat Already in Play: President Trump has already signaled a 25% tariff, citing the Korean National Assembly's implementation of the Korea-U.S. trade agreement as problematic.
Context and Background
Section 301 of the Trade Act, enacted in 1974, authorizes USTR to investigate unfair, discriminatory, or unreasonable trade practices by other countries and to impose tariffs, import restrictions, or other retaliatory measures. The most well-known precedent is the 2018 Section 301 investigation targeting China, which subsequently escalated into a hundreds-of-billions-of-dollars tariff war.
Unlike IEEPA, Section 301 requires an investigation → hearing → 90-day deadline process, making it slower, but its key strength is that it is insulated from judicial unconstitutionality rulings. This is why the Trump administration turned to this tool after IEEPA was blocked.
Outlook: Korea's Options
| Scenario | Likelihood | Impact on Korea |
|---|---|---|
| Formal Section 301 investigation into Coupang initiated | Medium | Blow to IT and platform sectors; pressure to renegotiate digital trade norms |
| Semiconductor and steel overcapacity investigation | Medium–High | Additional tariffs on key export sectors |
| Korea-U.S. negotiations result in investigation deferral | Possible | Conditions of additional investment in the U.S. and further market opening concessions |
| Tariff normalization after Section 122 expires | Low | Unlikely given Trump administration's stance |
Checklist: What to Monitor Now
Reference Links
- USTR Statement on IEEPA Decision
- Reuters: US trade chief on Section 301 plans (Feb 22)
- Korea Times: US investigation looms with new tariff risks to Korea (Feb 23)
- Baker Donelson: Trade Policy Shifts post-IEEPA
- USTR Section 301 Investigations Page
Image credit: US Supreme Court Building — Public domain (Carol M. Highsmith Archive, Library of Congress)