President Trump has pounced on South Korea with an ultimatum, threatening 25% tariffs on major exports unless the country’s parliament acts decisively on a trade agreement from 2024. The announcement encompasses automobiles, pharmaceuticals, and lumber among targeted product categories.
The October 2024 trade framework was celebrated as a diplomatic achievement when Trump and South Korean President Lee Jae Myung finalized it after months of tense negotiations. However, disputes about the legal status and ratification requirements have prevented the deal from taking full effect.
Korean officials were blindsided by Trump’s public announcement, receiving no advance diplomatic notification. The government is responding on multiple fronts, dispatching the trade minister to Washington for urgent consultations while simultaneously working with parliament to pass enabling legislation.
South Korea’s automotive manufacturers face substantial risk from the threatened tariff increase, as the sector depends heavily on American consumers purchasing nearly half of all Korean car exports. The 27% share of total exports represented by automobiles makes the industry particularly vulnerable.
Trump’s approach to trade policy continues to emphasize threats and unpredictability as negotiating tools. International economics experts express concern that such announcements undermine business confidence and create market volatility regardless of whether specific threats are ultimately carried out.
