Donald Trump has threatened to increase tariffs on South Korean imports to 25%, accusing Seoul’s parliament of refusing to enact a trade agreement the two countries reached last year. The president’s social media statement specifically criticized the Korean legislature for not living up to what he called a historic deal.
The trade framework was negotiated directly between Trump and South Korean President Lee Jae Myung in October 2024 and included significant provisions for reduced American tariffs on Korean vehicles and other products. In exchange, Seoul committed to substantial investments in American industries and markets.
South Korea’s government disputes the need for legislative ratification, initially characterizing the agreement as a memorandum of understanding rather than a binding treaty. However, political and diplomatic pressure is forcing reconsideration, with both major parties now pledging to advance five related bills through parliament.
The economic stakes are considerable, particularly for South Korea’s automotive manufacturers who depend heavily on the American market. When Trump’s tariff threat became public, shares in major Korean carmakers fell sharply before partially recovering, illustrating the sector’s vulnerability to US trade policy shifts.
This latest tariff threat exemplifies Trump’s broader approach to international relations in his second term, which has featured frequent use of trade policy as diplomatic leverage. Economists and market analysts express growing concern about the volatility created by such unpredictable policy announcements.
