Donald Trump has announced plans to increase tariffs on South Korean imports including automobiles, lumber, and pharmaceuticals from 15% to 25%, citing Seoul’s failure to ratify a trade agreement negotiated last year. The US president took to social media to express his frustration with South Korea’s legislative delays, stating that the country’s parliament has not enacted what he called a “Historic Trade Agreement.”
The tariff threat targets some of South Korea’s most significant export sectors, particularly the automotive industry which represents 27% of Korean exports to the United States. Following Trump’s announcement, shares in major South Korean carmakers initially plummeted by up to 5% before recovering later in the trading day. The United States absorbs nearly half of South Korea’s total car exports, making the American market critically important to Korean manufacturers.
South Korea’s presidential office responded by stating it received no advance notification of the tariff plans. Trade Minister Kim Jung-kwan, currently in Canada, has been directed to travel immediately to Washington for emergency talks with US Commerce Secretary Howard Lutnick. The Korean government maintains that the October 2024 agreement was structured as a memorandum of understanding rather than a binding treaty requiring parliamentary approval.
The controversy stems from legal ambiguity surrounding the trade deal finalized after Trump met South Korean President Lee Jae Myung last October. While Seoul’s presidential office initially insisted the agreement didn’t require legislative ratification, South Korea’s ruling party has now committed to working with opposition lawmakers to expedite passage of five pending bills that would enable promised investments in the United States.
This latest tariff threat represents another example of Trump using trade policy as a foreign policy tool during his second term. Recent days have seen similar threats directed at Canada, where Trump warned of 100% tariffs if a trade deal with China is concluded, and European nations in connection with his Greenland acquisition ambitions. Economists and market analysts express growing concern about the volatility created by such unpredictable trade policy shifts.