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Korean companies line up for $2.6 billion in US tariff refunds

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Korean companies line up for $2.6 billion in US tariff refunds

Korean companies line up for $2.6 billion in US tariff refunds

LG Energy Solution has already secured part of its reimbursement, while Hyundai Motor and Samsung SDI are expected to pursue claims

ByWoo-Sub Kim and Gil-Sung Yang / Published June 8, 2026 at 3:27 PM(KST)

South Korean companies could recoup more than 4 trillion won ($2.6 billion) in US tariffs after Washington began reimbursing duties imposed under the International Emergency Economic Powers Act, following a February court ruling deeming them unlawful.

LG Energy Solution Ltd. has sought roughly 300 billion won in refunds and has already recovered more than 100 billion won, according to people familiar with the matter on Sunday. The figure is expected to climb as the reimbursement process advances.

The decision was far from straightforward, the people said.

Executives at LG Energy Solution spent months weighing whether to pursue the claim, wary that becoming one of the first major Korean companies to seek reimbursement could complicate relations with Washington.

Financial realities, however, ultimately prevailed. Grappling with a protracted slowdown in global electric vehicle demand, the battery maker concluded it could not forgo a cash recovery that could be worth hundreds of billions of won, the people said.

The episode highlights the delicate calculus confronting many Korean exporters with extensive US exposure.

Refunds offer a rare liquidity boost at a time of softening demand, elevated financing costs and mounting trade expenses. Yet companies also risk attracting scrutiny from a Trump administration that continues to defend its tariff agenda.

Other Korean manufacturers are, however, expected to follow suit.

Hyundai Motor Group, Samsung SDI Co. and SK On Co. are said to be seeking to file claims, according to people familiar with the matter, in what industry officials expect to become a broader wave of reimbursement requests from Korean exporters.

A 4 TRILLION WON REFUND POOL

The reimbursement program covers reciprocal tariffs paid by Korean companies under IEEPA between April last year and February.

More than 6,000 Korean companies are believed to qualify, with total refunds estimated at upwards of 4 trillion won, according to industry officials.

The February US court ruling determined that IEEPA did not grant the president sweeping authority to impose the tariffs.

The US government began accepting refund applications in late April after establishing a dedicated claims-processing system.

The affected goods are those cleared through US customs after April 5 last year.

The Trump administration initially imposed a blanket 10% tariff on global imports through an executive order issued on April 2 last year. It later raised the levy to 25%, though South Korea negotiated a reduced rate of 15% beginning Aug. 7.

Korean customs officials estimate that exports to the US subject to the IEEPA tariffs totaled roughly $21 billion in 2024.

Korean companies paid the 10% tariff for about four months and the 15% tariff for roughly seven months.

Eligible categories include auto parts, batteries, processed steel products, machinery, chemicals and household appliances.

For battery manufacturers, qualifying items include EV battery cells, modules and packs, energy storage systems and battery materials and components.

Finished vehicles are excluded because they fall under Section 232 of the US Trade Expansion Act. Many auto parts, industrial materials and machinery products, however, remain eligible.

Steel, semiconductors and aluminum were exempted from the reciprocal tariffs and therefore do not qualify for refunds.

Industry officials expect major Korean companies to each recover hundreds of billions of won should they proceed with their claims.

General Motors Co. has said it could receive about $500 million in refunds tied to tariffs paid on parts, finished vehicles and other imports from Mexico, Canada and China.

Major European and Japanese companies are also understood to have secured reimbursements.

FASTER THAN EXPECTED

Korean companies initially braced for a cumbersome and protracted reimbursement process. Instead, industry officials say the system has proved more streamlined and efficient than anticipated.

Once a claim is submitted through the US government’s refund portal, straightforward cases are said to result in payment within roughly two weeks.

US Customs and Border Protection has indicated that final processing could still take 60 to 90 days.

Small and midsize Korean companies, generally less concerned about potential political repercussions from Washington, have moved more aggressively to file claims, industry officials said.

“If the system confirms that an item qualifies based on its classification code, the refund is processed without delay,” one industry official said.

“Despite President Trump’s combative response to the court ruling, there appears to be limited risk of retaliatory disadvantages.”

That perception has prompted larger exporters to revisit their earlier hesitation.

For manufacturers under mounting earnings pressure, the prospect of substantial reimbursements is becoming increasingly difficult to ignore.

NEW TARIFF RISKS REMAIN

The reimbursement windfall, however, may prove temporary.

Despite the ruling against the IEEPA tariffs, the Trump administration is preparing fresh duties under alternative legal authorities.

One proposal would impose additional tariffs ranging from 10% to 12.5% on goods from roughly 60 countries or economic blocs that Washington says have failed to curb trade involving products made with forced labor.

Under the proposal, the US would impose a 10% tariff on goods from Canada, the European Union, Taiwan and the UK, while Korea would face a 12.5% levy.

The measures are expected to be finalized following public hearings and additional consultations.

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