Donald Trump has brandished the tariff weapon against South Korea, threatening 25% duties on major exports to pressure Seoul’s parliament into action on a trade agreement from 2024. The president’s announcement blamed legislative delays for the threatened action.
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 accounts for 27% of South Korean exports to the United States. Market volatility following Trump’s announcement reflected investor concern about economic impact.
This tariff threat fits within Trump’s broader pattern of using trade policy as diplomatic leverage. The Atlantic Council’s international economics chair notes that even threats that aren’t implemented create market uncertainty and volatility with real economic consequences.