US President Donald Trump on Monday threatened to hike tariffs on goods imported from South Korea to 25 percent, citing what he said was the failure of the country’s legislature to codify the trade deal the two nations reached last year.
Trump in a social media post said the new rate would apply to vehicles, lumber, pharmaceutical products and “all other Reciprocal TARIFFS.”
Under the existing agreement, the US president set a 15 percent levy on South Korean exports.
Photo: AP
“South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote. “In each of these Deals, we have acted swiftly to reduce our TARIFFS in line with the Transaction agreed to. We, of course, expect our Trading Partners to do the same.”
If implemented, the move could have wide-ranging effects on major South Korean companies, such as Hyundai Motor Co, which exported 1.1 million vehicles to the US in 2024.
Trump’s announcement marks his latest move to ratchet up trade tensions with allies. In the past few weeks, he has threatened to raise duties on Canadian products to 100 percent if Ottawa signed a trade deal with China and to slap new charges on European countries’ goods over his quest to seize control of Greenland.
Still, Trump’s tariff threats have often been scaled back or reversed. Data compiled by Bloomberg show that about 27 percent of such threats since late 2024 were fully executed, with the share that remained in place lower at about 20 percent.
South Korea has been lauded as a model ally by the US for raising its defense spending to 3.5 percent of GDP, but tensions remain over the pace at which Seoul provides investment to the US under its earlier trade deal, and regulations seen to be inhibiting US digital commerce firms.
There is also a lack of clarity over an agreement to help with US shipbuilding, the construction of nuclear submarines and the provision of nuclear fuel for submarines.
Following last year’s trade deal announcement, a domestic bill called the “special law on strategic investment with the US” was introduced to the South Korean parliament in late November last year, triggering a retroactive cut in US auto tariffs from 25 percent to 15 percent.
Once passed, it would give South Korea’s government the legal authority to manage and carry out the large-scale investments it pledged to the US under the trade deal, but it has not been put on the fast track for approval for now.
A Bloomberg report last week said Seoul would hold off this year on implementing its annual US investment pledge that was part of the trade deal framework amid concerns over capital outflows and currency volatility.
South Korean Minister of Finance Koo Yun-cheol subsequently said the government was not intentionally delaying the investment, but was still in the process of selecting projects and completing required procedures.
He said it would be difficult for the funds to be allocated in the first half of the year given the time needed to identify sites, finalize designs and carry out approvals.
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