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Trump announces 25% tariffs on South Korean goods
US President Donald Trump declared a sharp increase in tariffs on South Korean imports, raising them to 25% from the previous 15%. The move follows accusations that Seoul has failed to uphold its end of a trade agreement finalized last year.
Products affected and Seoul's response
The new tariffs will apply to a broad range of goods, including automobiles, lumber, and pharmaceuticals. Trump stated on social media that South Korea had been slow to ratify the deal, while the US had already taken steps to lower its own tariffs as agreed.
South Korea's government responded by saying it had not received formal notification of the decision. Officials announced plans for urgent discussions with Washington, with Industry Minister Kim Jung-kwan set to travel to the US to meet US Commerce Secretary Howard Lutnick.
Economic impact and market reaction
South Korea exported approximately $123 billion worth of goods to the US last year, with automobiles accounting for roughly $30 billion of that total. Following Trump's announcement, shares of major South Korean automakers Hyundai and Kai initially dropped by as much as 6% but later recovered to close only about 1% lower.
The country's benchmark Kospi stock index also rebounded from early losses to finish the day up 2.7%. Analysts suggested investors were doubtful the tariffs would be implemented, citing Trump's recent reversal on similar threats against European trade partners.
"With a delegation en route from Seoul to Washington, markets seem to view this as more negotiation tactic than concrete policy," said Derren Nathan, head of equity research at Hargreaves Lansdown.
Background on the trade deal
Last October, Seoul and Washington reached an agreement that included a commitment from South Korea to invest $350 billion in the US, with a portion earmarked for shipbuilding. The following month, the US agreed to reduce tariffs on certain South Korean products once Seoul began the ratification process.
The deal was submitted to South Korea's National Assembly on November 26 and is currently under review, with local media reporting it is likely to pass in February.
Broader trade strategy
The tariffs will be paid by US companies importing South Korean goods, effectively imposing a 25% tax on those products. Trump has frequently used tariffs as a tool to advance foreign policy objectives during his second term.
Over the weekend, he threatened Canada with a 100% tariff if it pursued a trade deal with China. However, Canadian Prime Minister Mark Carney clarified that his country was not negotiating a free trade agreement with Beijing and had communicated this position to US officials.
Earlier, Trump had also threatened tariffs on eight countries, including the UK, for opposing US plans to acquire Greenland. He later retracted the threat, citing progress toward a "future deal" over the island, though the episode strained relations with Denmark and other NATO allies.
