Donald Trump has announced a plan to punish South Korea with 25% tariffs on major exports, citing legislative inaction on a trade agreement both countries negotiated in 2024. The president’s statement specifically blamed Seoul’s parliament for not ratifying the bilateral deal.
The trade and security agreement was celebrated as a breakthrough when finalized between Trump and South Korean President Lee Jae Myung in October 2024. However, the deal has since become mired in South Korean domestic political disputes about implementation requirements.
South Korea’s government maintains it received no advance warning of Trump’s tariff threat through official diplomatic channels. Officials are scrambling to respond, dispatching the trade minister to Washington while working with parliamentary leaders to expedite relevant legislation.
The automotive sector faces the most significant exposure to potential tariff increases, as it exports nearly half its production to the United States and represents 27% of total Korean exports to America. Market volatility following Trump’s announcement reflected these economic concerns.
This tariff threat fits within Trump’s broader pattern of using trade policy as diplomatic leverage. While not all threatened tariffs are implemented, the Atlantic Council’s international economics chair notes that volatility itself imposes costs on businesses and markets.