South Korea’s Lee plays down proposed US chip tariffs, warns of higher prices

By Heejin Kim and Joyce Lee

SEOUL, Jan 21 (Reuters) – South Korean President Lee Jae Myung said on Wednesday if Washington introduced higher U.S. tariffs on semiconductor imports, it would likely boost U.S. prices, playing down concerns about the proposed duty.

U.S. Commerce Secretary Howard Lutnick has said that South Korean and Taiwanese chipmakers may face tariffs of up to 100% unless they commit to increased production on American soil.

Lee said that given South Korean and Taiwanese chipmakers’ dominance of the market, a 100% U.S. import duty would likely sharply raise prices for chip products in the United States.

“They have a monopoly of 80 to 90% … so most of it is likely to be passed on to U.S. prices,” Lee told a news conference.

South Korea’s Samsung Electronics and SK Hynix, and Taiwanese chipmaker TSMC, dominate the global market in memory chips and chip contract manufacturing, respectively.

South Korea already has safeguards in place under a trade agreement with the U.S. to ensure its chipmakers would not be left at a disadvantage to Taiwanese or any other global competitors, Lee said.

South Korea’s exports rose to a record $709.4 billion in 2025, up 3.8% from a year earlier, as semiconductor shipments jumped 22% on strong demand for artificial intelligence investments.

Chip exports to the U.S. accounted for 8% of the total $173.4 billion semiconductor exports, while China remained the biggest market, followed by Taiwan and Vietnam.

SLUMPING WON CURRENCY

Lee also touched on the slumping won in his remarks, citing expectations by South Korean authorities that the currency would strengthen to around the 1,400 per dollar level in a month or two.

The president cautioned domestic policies alone would not be sufficient to stabilise foreign exchange markets as it was somewhat correlated with weakness in the Japanese yen, adding that the won was faring comparably better.

Lee also said the domestic stock market, which was the world’s best performer last year with a 76% jump, was still undervalued.

NORTH KOREA TALKS

Lee said he was pursuing diplomatic efforts to enable North Korea and the U.S. to resume dialogue and that a pragmatic approach was needed to deal with Pyongyang.

“There is a benefit to making the North stop making nuclear materials and not export nukes and stop developing ICBMs,” he said, referring to intercontinental ballistic missiles, adding it would be hard to imagine the North would actually give up its nuclear weapons programme.

He said North Korea was producing enough nuclear material to make 10 to 20 nuclear weapons a year.

North Korea has so far snubbed outreach by Lee and U.S. President Donald Trump to resume dialogue. The talks have stalled since Trump met the North’s leader Kim Jong Un in 2019, amid disagreement over lifting sanctions against Pyongyang and nuclear dismantlement.

RELIGION IN POLITICS

Lee also underscored a need to root out religious influence in politics.

“The principle of separation of church and state should never be broken. And it must be punished strictly,” Lee said.

South Korea’s parliament is currently reviewing a bill on setting up a special prosecutor to investigate the Unification Church’s involvement in politics, and is debating whether to include in the probe the Shincheonji Church of Jesus, founded and headed by self-proclaimed messiah Lee Man-hee.

Han Hak-ja, the head of the Unification Church, now known as the Family Federation for World Peace and Unification, is on trial for allegedly seeking to bribe the wife of former President Yoon Suk Yeol and another close confidante.

Han has denied wrongdoing.

(Reporting by Heejin Kim, Joyce Lee, Cynthia Kim, Kyu-seok Shim, Jihoon Lee, writing by Jack Kim; Editing by Ed Davies and Christian Schmollinger)