Donald Trump has targeted South Korea with a harsh tariff plan, threatening to raise duties to 25% on major exports unless Seoul’s parliament acts on a trade agreement from last year. The president’s announcement specifically criticized the Korean legislature for not enacting the bilateral deal.
The trade framework was finalized after months of negotiations between Trump and South Korean President Lee Jae Myung in October 2024, featuring provisions for reduced American tariffs in exchange for Korean investment commitments. However, the deal has languished in legal uncertainty within South Korea.
South Korea’s government disputes the characterization of its obligations, initially maintaining that parliamentary approval was unnecessary. However, political pressure is forcing reconsideration, with both major parties now pledging to advance relevant legislation.
The automotive sector faces the greatest risk from potential tariff increases, accounting for 27% of South Korean exports to the United States. Market reaction to Trump’s announcement included sharp stock price volatility for Korean carmakers.
This tariff threat fits within Trump’s broader strategy of using trade policy as diplomatic leverage in his second term. International economics experts warn that the unpredictability of such announcements undermines business confidence and creates market volatility.
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