Donald Trump has blamed South Korea’s parliament for failing to ratify a trade agreement and announced plans to raise tariffs on Korean exports to 25% as punishment. The threat specifically targets automobiles, lumber, and pharmaceutical products entering the American market.
The October 2024 trade framework was celebrated as a breakthrough when finalized between Trump and South Korean President Lee Jae Myung, featuring reciprocal concessions including reduced US tariffs on Korean vehicles. However, the deal has since become mired in South Korean domestic political disputes about implementation requirements.
South Korea’s presidential office maintains that the agreement was structured as a memorandum of understanding not requiring legislative approval, though this position is being reconsidered under pressure. Both ruling and opposition parties now commit to expediting five bills that would formalize Seoul’s commitments.
The economic implications are significant, particularly for the automotive industry which exports nearly half its production to the United States. When Trump’s tariff threat became public, Korean carmaker stocks fell sharply before recovering some losses, demonstrating the sector’s sensitivity to trade policy changes.
This latest tariff threat exemplifies Trump’s continued reliance on trade policy as a central foreign policy tool, following similar recent warnings to other nations. International trade experts express concern that the unpredictability undermines stable business planning and creates unnecessary economic volatility.