Donald Trump has played hardball with South Korea, threatening to impose 25% tariffs on major exports to force legislative action on a trade agreement from last year. The president’s statement blamed Seoul’s parliament for not enacting the bilateral deal.
The trade framework was negotiated directly between Trump and South Korean President Lee Jae Myung in October 2024, including provisions for reduced American tariffs in exchange for Korean investment commitments. However, the deal has languished in legal uncertainty.
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 diplomatic pressure. Both ruling and opposition parties now commit to expediting relevant bills.
The economic stakes are considerable, particularly for the automotive sector which exports nearly half its production to the United States and represents more than a quarter of total Korean exports to America. Stock market reaction included sharp volatility.
This latest tariff threat exemplifies Trump’s continued reliance on trade policy as a foreign policy instrument. Economists warn that the unpredictability creates business uncertainty and market volatility regardless of implementation.