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Lee Jae-min The author is a professor of law at the Seoul National University’s School of Law. The outcome was widely anticipated, but the impact has been larger than expected. On Friday, the U.S. Supreme Court ruled that reciprocal tariffs violated the law, finding that the 1977 International Emergency Economic Powers Act (IEEPA), the legal basis cited by the administration, does not authorize tariff measures. The reciprocal tariffs were effectively eliminated immediately, after just 10 months. US President Donald Trump delivers the first State of the Union address of his second term to a joint session of Congress in the House Chamber of the United States Capitol in Washington, DC, on February 24, 2026. [AFP/YONHAP] This raises an immediate question about the Korea-U.S. Strategic Investment Agreement announced on Nov. 14, 2025. Reciprocal tariffs were a key starting point for that framework. With its foundation removed, concerns about the structural stability of the agreement are inevitable. Given the extensive negotiations that led to the agreement, suspending or reversing it now is neither realistic nor desirable. The investment framework has become a central pillar of bilateral relations. If that pillar is shaken, the consequences could extend beyond investment to economic, financial, security and nuclear cooperation. Despite uncertainty, maintaining the basic framework for now appears to be the most practical course. Even so, problems remain. Several provisions in the investment agreement are directly linked to reciprocal tariffs. With the tariffs invalidated, leaving those references unchanged risks confusion. For example, the agreement’s opening calls for the faithful implementation of the “July 30, 2025, agreement,” whose core element was reciprocal tariffs. Now that those tariffs have been nullified, such specific language no longer reflects reality. Another clause states that the United States will honor commitments contained in a joint fact sheet while Korea fulfills its investment obligations. Yet the central U.S. commitment in that document also concerned reciprocal tariffs. In recent discussions, the U.S. side even raised the possibility of restoring a 25 percent reciprocal tariff to press for faster investment. With the legal basis now gone, that linkage has effectively disappeared. Related ArticleTrump threatens higher tariffs on countries who back out of deals after Supreme Court rulingKorea 'not making predictions' as Trump unsheathes new trade war weaponKorean economy faces uncertainty after U.S. Supreme Court axes Trump tariffsTrump raises new global tariff to 15% from 10% following Supreme Court tariff rulingAfter U.S. Supreme Court ruling and new Trump tariff, many countries keeping a wary eye on Washington At a minimum, these provisions require adjustment. The agreement looks ahead for as long as a decade. If left unresolved, the inconsistencies could later be raised by various stakeholders, creating unnecessary disputes. Clarification now would be safer. The problem stems from detailed language describing reciprocal exchanges, only for one side’s concession to vanish unexpectedly. While the overall framework should remain intact, the specific references should be replaced with more general language emphasizing investment as part of broader cooperation serving the national interests of both countries. The agreement itself already allows for such changes. It includes a clause permitting revisions by mutual consent and another requiring notification when domestic legal conditions change. Although IEEPA remains in force, the Supreme Court’s ruling represents a significant shift in its interpretation and application, arguably equivalent to a change in domestic law. Following the ruling, the U.S. government announced a separate 15 percent global tariff under a different statute, Section 122 of the Trade Act. Unlike reciprocal tariffs, however, this measure is temporary and limited to 150 days. Other possible tariff authorities, including Section 232 of the Trade Expansion Act and Sections 301 and 201 of U.S. trade law, have also been discussed. These measures are subject to formal procedures such as public notice, investigation and stakeholder consultation. Even under accelerated timelines, they typically require three to six months and involve product- and country-specific determinations. Their structure differs fundamentally from the broad reciprocal tariff approach. President Lee Jae Myung presents a fountain pen he used to sign the guest book to U.S. President Donald Trump during a Korea-U.S. summit at the White House in Washington, D.C., on Aug. 25, 2025 (local time). [JOINT PRESS CORPS] In this sense, the reciprocal tariffs were highly unusual. Their sudden disappearance represents a significant policy shift. The investment framework should reflect that change through updated documentation. Such revisions may be administratively burdensome, but would reduce legal and political risks. If new understandings have emerged during ongoing investment discussions, they could also be incorporated as part of the update. As confirmed repeatedly, the Korea-U.S. investment arrangement is not a treaty but an intergovernmental agreement. As long as both sides acknowledge the changed circumstances and avoid altering the core structure, technical revisions should not take long. The bilateral relationship has entered a new phase. The basic framework and implementation of the investment agreement, which reflects a broader alignment of national interests, should be maintained. At the same time, adjustments to reflect the changed legal and policy environment are both necessary and prudent. This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
