President Donald Trump announced a decision to increase tariffs on key imports from South Korea. He said he would raise the duty rate from 15% to 25% on automobiles, pharmaceutical drugs, lumber, and other goods.
The president made this declaration on his social media platform, framing the move as a direct response to South Korea’s legislative delay.
Trump explicitly tied the tariff increase to the stalled trade agreement. “South Korea’s Legislature is not living up to its Deal with the United States,” he stated.
He emphasized that the increase was a consequence of inaction, writing, “Because the Korean Legislature hasn’t enacted our Historic Trade Agreement… I am hereby increasing South Korean TARIFFS.”
Core Trade Deal and Delayed Ratification
This dispute centered on a trade framework initially agreed upon months earlier. President Trump and South Korean President Lee Jae Myung first reached a deal in July 2025 and reaffirmed the terms during a meeting in October 2025.
Moreover the United States reduced its blanket tariff rate on South Korean imports to 15% as part of this understanding.
In return, South Korea pledged to invest hundreds of billions of dollars into United States strategic sectors. However the agreement required formal ratification by South Korea’s National Assembly to take full effect. By January 2026, the legislature had not approved the deal, leading to the presidential tariff announcement.
Economic Impact on South Korea
The tariff threat targeted sectors vital to South Korea’s export-driven economy. Automobiles and auto parts represented the country’s largest export to the United States, constituting nearly a third of all South Korean exports to the U.S. market.
Major companies like Hyundai Motor Group, for which the U.S. accounts for 39% of overall sales, faced significant exposure.
Furthermore the broader economic relationship was substantial. South Korea ranked among the top ten sources of imports for the United States, with nearly $150 billion in goods traded annually.
The proposed tariff hike introduced severe uncertainty for South Korean industries and complicated long-term investment planning.
Legal and Market Uncertainty
The announcement occurred amidst ongoing legal challenges to the president’s trade policy. The U.S. Supreme Court was concurrently reviewing a case that questioned the legal authority to impose tariffs unilaterally without congressional approval. A ruling from the Court was pending at the time of the tariff declaration.
Additionally market analysts noted a pattern of tariff threats that sometimes did not materialize. Meanwhile South Korean officials cited practical challenges, such as a weak national currency.
In executing the large scale U.S. investments required by the deal. This situation created a volatile environment for international trade and economic cooperation between the two allies.
