Washington D.C. – US President Donald Trump announced on Monday that he is hiking tariffs on South Korean goods, including automobiles, lumber, and pharmaceuticals, accusing the country of failing to honor an earlier trade pact struck with Washington. The decision to increase tariff levels from 15% to 25% represents a significant escalation in trade tensions between the two allies.
Trump’s Justification for Hiking Tariffs
Trump explained his decision for hiking tariffs through a post on his Truth Social platform, stating that “South Korea’s Legislature is not living up to its Deal with the United States.” The President emphasized that he was hiking tariffs “because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative.”
This announcement of hiking tariffs comes as a surprise reversal, occurring just months after Washington and Seoul struck what was described as a comprehensive trade and security deal following tense negotiations. The agreement was finalized after Trump met his South Korean counterpart Lee Jae Myung in October, and included substantial investment promises by South Korea alongside tariff cuts by the United States.
South Korea’s Response to Tariff Threat
South Korea’s Presidential office revealed it had not been informed about the plans for hiking tariffs in advance, highlighting a breakdown in diplomatic communication between the two nations. The office announced that Trade Minister Kim Jung-kwan, currently in Canada, would immediately head to Washington for talks on the issue with US Commerce Secretary Howard Lutnick.
The response to Trump’s announcement about hiking tariffs revealed a fundamental disagreement over the legal status of the October agreement. Seoul’s Presidential office insisted in November that the deal does not require parliamentary approval, arguing it represents a memorandum of understanding rather than a binding legal document requiring legislative ratification.
When questioned about whether the tariff deal had been submitted to parliament for approval, a senior South Korean official stated they were looking into the matter but declined to elaborate further. This ambiguity has become the central issue in Trump’s justification for hiking tariffs on South Korean products.
Details of the Original Trade Agreement
Under the original pact that Trump now cites as grounds for hiking tariffs, Washington agreed to maintain levies of up to 15 percent on South Korean goods including vehicles, car parts, and pharmaceuticals. Crucially, the deal’s terms brought US tariffs on South Korean cars down from a 25 percent level to 15 percent.
Trump’s latest threat of hiking tariffs, if enacted, would completely reverse that reduction and return duties to the previous 25 percent level. This reversal would effectively nullify one of the most significant concessions South Korea obtained through months of difficult negotiations, making the prospect of hiking tariffs particularly damaging to bilateral relations.
Economic Impact of Hiking Tariffs
The consequences of hiking tariffs to 25 percent would be substantial for South Korea’s export-dependent economy. The auto industry accounts for 27 percent of South Korea’s exports to the United States, which absorbs nearly half of the country’s total car exports globally.
A reversal to the higher tariff level through hiking tariffs could place South Korean exports in a less advantageous position compared with economies like Japan and the European Union, which have both secured deals for a 15 percent US tariff rate. This competitive disadvantage would be particularly acute in the automotive sector, where South Korean manufacturers compete directly with Japanese and European brands.
The Trump administration has yet to issue formal notices to enact the changes related to hiking tariffs, leaving some uncertainty about the timeline and implementation of the threatened increase. However, the announcement itself has already created significant concern in Seoul’s business community.
Pattern of Trump’s Trade Threats
Trump’s threat of hiking tariffs on South Korea represents his latest salvo against key trading partners in recent days, reflecting a broader pattern of aggressive trade policy. Over the weekend, Trump warned Canada that if it concludes a trade deal with China, he would impose a 100 percent tariff on all goods coming across the border.
Earlier in January, Trump also threatened to slap tariffs on multiple European nations until his proposed purchase of Greenland is achieved, though he has since backed off that particular threat. This pattern suggests that hiking tariffs has become a preferred diplomatic tool for the Trump administration to pressure allies and trading partners.
Legal Limbo and Future Uncertainty
Since the October agreement was finalized, it has remained in legal limbo within South Korea’s domestic political system. This ambiguous status has provided Trump with his rationale for hiking tariffs, arguing that South Korea has failed to properly ratify the agreement through its legislature.
The dispute highlights fundamental differences in how the two countries interpret international agreements and their domestic implementation requirements. Whether hiking tariffs actually proceeds will depend on negotiations between Trade Minister Kim Jung-kwan and US Commerce Secretary Howard Lutnick, with the outcome having significant implications for the broader US-South Korea alliance and regional trade dynamics.
