Donald Trump has struck at South Korea with a threat of 25% tariffs on major exports, blaming Seoul for delays in implementing a trade agreement finalized last year. The president’s statement specifically accused Korea’s parliament of not living up to commitments made in the bilateral deal.
The trade framework was negotiated directly between Trump and South Korean President Lee Jae Myung in October 2024, including provisions for reduced American tariffs in exchange for Korean investment commitments. However, the deal has become mired in legal and political debates within South Korea about ratification requirements.
South Korea’s presidential office maintains that the agreement was structured as a memorandum of understanding not requiring legislative approval, though this interpretation is being challenged. Both ruling and opposition parties are now working to expedite five bills through parliament that would enable the promised investments.
The potential economic impact is substantial, particularly for the automotive sector which accounts for more than a quarter of South Korean exports to the United States. Market reaction was swift, with Korean carmaker stocks dropping up to 5% before partially recovering as investors assessed the situation.
This latest tariff threat exemplifies Trump’s continued reliance on trade policy as a central foreign policy instrument. Economists and market analysts express growing concern about the volatility created by unpredictable policy announcements, noting that uncertainty itself imposes real costs.
Trump Strikes at South Korea with 25% Tariff Threat Over Agreement Delays
