Business & Economics
Seoul Invokes “No-Less-Favorable” Clause as U.S. Ties Chip Tariff Relief to Local Investment
On 18 Jan 2026 Seoul opened emergency negotiations with Washington, citing a 2025 joint fact sheet guaranteeing equal treatment, after President Trump’s new AI-chip duties and threats of up to 100 % tariffs put Samsung and SK Hynix at risk unless they expand U.S. manufacturing.
Focusing Facts
- Trump’s 14 Jan 2026 Section 232 proclamation slapped a 25 % tariff on certain AI semiconductors imported for re-export.
- U.S. Commerce Secretary Howard Lutnick warned on 16 Jan 2026 that foreign memory makers could face tariffs “up to 100 %” unless they “build in America.”
- A parallel 2026 U.S.–Taiwan accord grants tariff-free quotas in exchange for at least US$250 billion of Taiwanese chip investment in the U.S., including 2.5× construction-phase capacity imports.
Context
This standoff echoes the 1986 U.S.–Japan Semiconductor Agreement, when Washington used punitive duties to force Tokyo’s firms to shift production and share technology—an early salvo in techno-nationalist trade policy. Four decades later, the target is no longer Japan’s DRAMs but Korean memory and Taiwanese foundry capacity, yet the playbook is similar: weaponize market access to force on-shore manufacturing. The episode highlights a long-running trend toward securitizing supply chains—visible in the 2022 CHIPS Act and now in ad-hoc ‘invest-or-pay’ ultimatums. On a century timescale, the question is whether such bilateral, investment-for-access deals accelerate a de-globalized semiconductor map reminiscent of early-20th-century oil concessions, or backfire by driving allies to diversify away from an unpredictable U.S. market. Either way, Seoul’s appeal to a legal clause underscores how even close allies must lawyer up when industrial policy turns zero-sum.
Perspectives
South Korean domestic media
e.g., The Korea Times, Yonhap News Agency, The Korea Herald, KBS WORLD Radio, Chosun.com — Stress that Seoul will invoke the joint fact-sheet’s “no less favorable” clause to secure Taiwan-level tariff terms and shield Samsung and SK Hynix from any harsher U.S. duties. National-interest framing tends to magnify the threat of U.S. pressure while portraying the Korean government as a proactive defender; coverage largely echoes officials’ talking points and may underplay how far Seoul will actually need to bend on new U.S. investment demands.
International news wires
e.g., CNA, EconoTimes, Devdiscourse — Report that South Korea is negotiating for favorable treatment and that officials expect U.S. AI-chip tariffs to have only a limited impact on Korean memory-chip giants. Straight-wire style leans on government spokespeople and offers little scrutiny, so the economic and geopolitical stakes can seem smaller and more routine than South Korean or critical outlets suggest.
Business & tech outlets highlighting U.S. tariff pressure
e.g., heise online, The Business Times — Emphasize the Trump administration’s hard-ball strategy—threats of 100 % tariffs and demands for hundreds of billions in on-shore investment—framing it as aggressive industrial policy that also ensnares South Korea after Taiwan’s deal. By spotlighting dramatic numbers and tight timelines, these stories can verge on alarmism and implicitly critique U.S. policy, potentially overstating its immediacy or ignoring possible negotiated compromises.