The U.S. Supreme Court’s decision to invalidate tariffs imposed under the International Emergency Economic Powers Act did more than settle a constitutional question in Washington. It forced exporting countries to reassess exposure in real time. In Seoul, the response was immediate and procedural, not political. For thousands of Korean exporters, the issue is no longer whether tariffs were lawful, but whether money already paid can be recovered.

U.S. Supreme Court IEEPA Tariff Ruling Prompts Korea’s Immediate SME Response

On February 20 (local time), the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) did not authorize the president to impose reciprocal tariffs, affirming that the power to levy taxes, including tariffs, rests with Congress.

The following day, South Korea’s Ministry of SMEs and Startups (MSS) and the Korea Customs Service (KCS) moved to contain potential disruption for exporters.

MSS confirmed that it shared the ruling through a pre-established hotline with 11 major associations, including the Korea Federation of SMEs, the Korea Venture Business Association, and the Inno-Biz Association.

According to Vice Minister Noh Yong-seok on February 21,

“We will monitor follow-up developments within the United States while assessing the impact on the SME sector together with relevant associations and organizations.”

KCS announced it would immediately begin providing guidance on basic refund procedures and claim deadlines to companies exporting to the United States. Through analysis of export declaration data, the agency identified approximately 6,000 firms that exported reciprocal tariff-targeted items or steel and aluminum products under DDP (Delivered Duty Paid) terms.

Under DDP conditions, exporters — rather than U.S.-based importers — pay duties directly. In such cases, Korean exporters may apply to U.S. Customs and Border Protection (CBP) for refunds themselves.

Why the Refund Mechanism Changes the Conversation for Korean SMEs

For months, tariff volatility has been framed as a pricing problem. The Supreme Court ruling reframes it as a compliance and cash-flow issue.

Out of roughly 24,000 Korean firms that exported goods subject to reciprocal or product-specific tariffs to the U.S., about 6,000 used DDP terms. And this distinction matters because DDP exporters bore tariff costs directly and now face a potential refund process that requires navigating U.S. customs procedures.

This shifts the risk profile. Instead of renegotiating contracts, companies must now evaluate documentation, liquidation timelines, and CBP procedures. The Korean government’s rapid identification of affected firms signals that export governance has evolved beyond diplomatic negotiation into operational intervention.

MSS has indicated that if refund eligibility and procedures become clearer, it will coordinate with the Ministry of Trade, Industry and Energy and the Korea Customs Service to provide explanatory briefings and customized consulting.

Refund Eligibility Does Not Eliminate Execution Friction

The ruling invalidated IEEPA-based reciprocal tariffs. It did not automatically trigger refunds, nor did it address tariffs imposed under other statutes such as Section 232 or Section 301.

That distinction introduces uncertainty.

Refund claims must be processed through U.S. Customs and Border Protection. While KCS stated it will maintain close coordination with CBP and provide real-time updates, the detailed refund framework has yet to be formally announced by U.S. authorities.

For exporting SMEs, this creates a familiar gap between legal clarity and administrative execution. Even if refunds become possible, firms must meet procedural requirements, preserve documentation, and monitor deadlines. For smaller exporters without in-house customs expertise, that process may require external advisory support.

The government’s activation of hotlines and export support centers reflects awareness of that friction. Yet the operational burden ultimately rests with firms.

What This Enables — and What It Leaves Untouched

The Supreme Court ruling removes a layer of tariff exposure tied specifically to IEEPA. For DDP exporters, it potentially opens a path to financial recovery.

However, it still does not remove sectoral tariffs imposed under other legal authorities. Automotive, steel, and certain product-specific duties remain governed by separate statutes. Nor does it resolve broader trade policy uncertainty, as U.S. authorities retain alternative legal tools to impose tariffs under different frameworks.

For Korean exporters, the immediate opportunity lies in reclaiming previously paid duties where eligible. But the longer-term risk remains structural: exposure to evolving U.S. trade policy instruments.

What Global Founders and Investors Should Understand About Korea’s Response

The Korean government’s reaction reveals less about politics and more about administrative capacity.

Rather than issuing broad diplomatic statements, agencies moved to identify affected exporters, clarify DDP eligibility, and prepare procedural guidance. The reactivation of coordination mechanisms, including cross-ministerial monitoring and export enterprise support centers, suggests that trade risk is now treated as an operational management function.

For global investors assessing Korean startups, it indicates that Korea’s export governance infrastructure is capable of rapid data analysis and targeted outreach. However, it also highlights a constraint: SMEs remain directly exposed to foreign administrative systems when cross-border contracts allocate duty responsibility to exporters.

The episode reinforces a practical lesson for founders scaling internationally. Trade structure — including Incoterms such as DDP — can determine who absorbs geopolitical shocks.

Judicial Clarity Does Not End Trade Volatility

The Supreme Court’s ruling restored constitutional boundaries in the United States. It did not stabilize the global trade environment.

In Seoul, agencies are moving to convert legal change into procedural guidance. Whether affected exporters recover funds will depend on documentation, timing, and cross-border administrative coordination.

The broader signal is less dramatic but more durable. Export resilience is no longer defined only by market diversification or tariff negotiation. It now depends on how quickly governments and firms translate legal shifts into executable steps.

Key Takeaways on Korea’s Response on U.S. Supreme Court’s Trump’s Tariffs Rulings

• The U.S. Supreme Court ruled that IEEPA does not authorize reciprocal tariffs, affirming that tariff authority rests with Congress.
• Korea’s Ministry of SMEs and Startups activated its hotline with 11 associations to assess SME exposure.
• The Korea Customs Service identified approximately 6,000 exporters using DDP terms who may be eligible to seek refunds directly from U.S. CBP.
• Refund procedures have not yet been fully detailed by U.S. authorities, creating execution uncertainty.
• Sector-specific tariffs imposed under other statutes remain unaffected.
• The episode underscores how Incoterms allocation, such as DDP, shapes startup-level exposure to global trade risk.

– Stay Ahead in Korea’s Startup Scene –
Get real-time insights, funding updates, and policy shifts shaping Korea’s innovation ecosystem.
➡️ Follow KoreaTechDesk on LinkedIn, X (Twitter), Threads, Bluesky, Telegram, Facebook, and WhatsApp Channel.