Donald Trump has confronted South Korea with a threat of 25% tariffs on major exports, citing parliamentary inaction on a trade agreement both countries negotiated in 2024. The president’s announcement blamed Seoul’s legislature for failing to ratify the bilateral deal.
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 and exports nearly half its production to America. Market volatility following Trump’s announcement reflected these economic concerns.
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.