U.S. non-tariff barrier claims lack credibility

The Office of the United States Trade Representative (USTR), a presidential-level body, has released its annual National Trade Estimate Report on Foreign Trade Barriers, outlining non-tariff barriers across trading partners just before initiating reciprocal tariff measures. The section on South Korea cites various issues, including mandatory technology transfers in defense procurement, a ban on foreign ownership in the nuclear energy sector, and restrictions on beef imports from cattle over 30 months old. Most of these practices are either globally accepted or of negligible economic benefit to the U.S., even if reversed.

For the first time, the 2025 report criticizes South Korea's practice of requiring offset agreements for foreign defense contractors involved in deals exceeding 10 million U.S. dollars. Offset agreements typically mandate technology transfers or other reciprocal benefits in exchange for arms purchases. This is a widely accepted practice by over 130 countries to strengthen their defense autonomy. Yet, the U.S. singles out South Korea, one of its largest arms importers, as if the practice were unjustified.

The report also raises objections to South Korea’s restrictions on foreign ownership of nuclear power plants. While previous reports noted limitations in foreign investment for hydro, thermal, and solar energy, this is the first time the U.S. has demanded open access to South Korea’s nuclear market. Given that nuclear power is a cheap and stable energy source, closely tied to national security and electricity pricing, few countries fully liberalize their nuclear sectors. France, for instance, re-nationalized its state-owned utility EDF following the war in Ukraine for precisely those reasons.

Furthermore, the U.S. criticized Korea’s long-standing ban on beef imports from American cattle over 30 months old, a policy implemented since 2008 due to concerns over mad cow disease. Despite the restriction, Korea was the largest importer of U.S. beef last year. Removing the age-based restriction is likely to stoke consumer fears, possibly reducing imports, which would be counterproductive for U.S. beef exporters.

The genuine concern is that these questionable complaints from U.S. businesses may serve as a pretext to impose higher reciprocal tariffs on Korea. A formal notice of such tariffs could arrive as early as today, with Washington using it as leverage to extract further concessions. While Korea should consider easing regulations that diverge from global standards, it must also stand firm against unreasonable demands that threaten core national interests.