[New York = E-Daily Seong Joowon Correspondent] Analysts suggest that the U.S. Democratic Party may demand the Trump administration establish a formal procedure for requesting tariff exemptions and reductions in response to the public’s dissatisfaction with the cost of living, as revealed in the midterm elections. Since the Democrats also prioritize protecting U.S. manufacturing, analysts say they are likely to press for the creation of a channel to apply for exemptions or reductions when there are legitimate reasons—such as inflationary pressures or investment needs—rather than calling for a complete repeal of tariffs.
Dr. Je Hyun-jeong, a senior researcher at the Korea-U.S. Economic Institute (KEI), a U.S. foreign policy and trade think tank, stated in an interview with E-Daily on the 5th (local time), “There is a possibility that Congress will pressure the administration to establish a formal procedure for requesting exemptions from tariff measures based on legitimate reasons, such as rising prices or investment needs.”
Senior Researcher Je viewed that with the Democrats controlling both chambers of Congress, oversight of tariff policies—which have exacerbated inflationary pressures—could intensify. However, she explained that since tariffs are also linked to the competitiveness of U.S. manufacturing and the expansion of investment, it is difficult to completely dismiss the Trump administration’s measures.
In particular, he pointed out that tariffs imposed under Section 232 of the Trade Expansion Act and Section 301 of the Trade Act are measures based on existing laws enacted by Congress. While legislative changes to the relevant laws are necessary, the outlook is that this process will not proceed smoothly simply because the Democrats have become the majority party. Instead, he noted that the Democrats, having secured committee chairmanships, now have greater leeway to challenge the Trump administration’s tariff measures.
In this process, procedures for tariff exemptions and reductions could emerge as a key issue. Senior Researcher Je pointed out that there are currently no transparent and legitimate procedures in place regarding tariff exemptions and reductions. He added, “We expect to see an increase in efforts by companies and industries to take advantage of the shifting power dynamics between Congress and the administration.”
It was predicted that President Trump would focus on achievements linking tariffs to investment. The reasoning is that, to overcome his lame-duck status and prepare for the 2028 election, he may seek to demonstrate an expansion of investment in strategic industries within the United States. The results of the ongoing Section 232 investigation and the Section 301 investigation into industrial overproduction were cited as indicators of the policy direction.
He expressed caution regarding drastic changes in U.S.-South Korea trade relations. This is because the Democratic Party is also highly likely to maintain the direction of containing China and reviving U.S. manufacturing. The key issue is what checks will be applied to measures targeting allies, including South Korea. He also highlighted discussions on project selection under the U.S.-South Korea Investment Memorandum of Understanding (MOU) as a point of focus.
He cautioned South Korean companies against rushing to respond. Dr. Je emphasized, “We should refrain from making hasty analyses or predictions based solely on the immediate changes in Congress, as well as from making judgments or decisions regarding business direction based on them.” In particular, he advised companies that have invested in the U.S. to monitor the movements of local U.S. companies and industry associations, and to assess internal congressional trends and potential changes before the new Congress is inaugurated.