President Donald Trump announced on Monday an increase in tariffs on goods imported from South Korea, raising the rate from 15% to 25%. “Because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative, I am hereby increasing South Korean tariffs on autos, lumber, pharma, and all other reciprocal tariffs, from 15% to 25%,” Trump wrote in a Truth Social post. The timing of the implementation of the new tariffs remains uncertain. Seoul intends to “respond calmly” and express “its willingness to fulfill the tariff agreement” to the US,” stated Kang Yoo-jung on Tuesday. Korean officials are currently expediting in-person meetings with officials from the Trump administration. The trade minister of the country has expedited a planned trip to the United States and is set to engage with Trade Representative Jamieson Greer shortly, according to Kang. Additionally, the industry minister will incorporate a visit to the US to confer with Secretary of Commerce Howard Lutnick, following the completion of his ongoing visit to Canada.
South Korea’s benchmark index, Kospi, experienced a decline of more than 1% before making a recovery in the early hours of trading on Tuesday. Hyundai, the nation’s leading automobile manufacturer, experienced a decline exceeding 2.2% as of 9:47 am. In 2024, South Korea emerged as one of the leading suppliers of foreign goods to the United States, exporting $132 billion in merchandise, as reported by the Commerce Department. The primary exports to the United States encompass automobiles and automotive components, alongside semiconductors and electronic devices. The imposition of higher levies poses a risk of increasing the prices of these goods.
In July, Trump revealed a trade agreement with South Korea that averted an increase in tariffs on goods from the nation, maintaining them at 10% rather than escalating to 25%. The agreement additionally stipulated preferential rates on imported automobiles, alongside various other commodities. The potential for Trump to implement widespread tariff increases on imports from South Korea and other nations may be constrained by the decision in a significant tariff case presently under consideration by the Supreme Court.
The case will assess whether Trump possessed the legal authority to implement sweeping tariffs specific to certain countries. If the justices rule against the administration, Trump would likely face constraints in promptly altering tariff rates for all goods imported from particular nations. Trump’s announcement comes in the wake of a series of recent tariff threats, notably a 100% tariff on Canadian goods and an extra 10% levy on nations that oppose his Greenland ambitions, a position he subsequently retracted.