Trump to raise tariffs on South Korean goods to 25%
What's the story
US President Donald Trump has announced plans to increase tariffs on a range of South Korean goods, including automobiles, lumber, and pharmaceuticals. The hike would see tariff rates rise from 15% to 25%. On his Truth Social platform, Trump accused South Korea's legislature of failing to uphold an earlier trade agreement with the US.
Diplomatic discussions
South Korea's response and future talks
In light of Trump's announcement, South Korea's presidential office said it had not been informed about the tariff hike plans in advance. The office has sent Trade Minister Kim Jung-kwan, who is currently in Canada, to Washington for talks with US Commerce Secretary Howard Lutnick on the issue. This comes after months of negotiations between Washington and Seoul over a trade and security deal.
Agreement details
Trade and security deal: A timeline of events
The trade and security deal was finalized after Trump met his South Korean counterpart Lee Jae Myung in October. The agreement included investment promises by South Korea and tariff cuts by the US. Under the pact, Washington would keep tariffs of up to 15% on South Korean goods such as cars, auto parts, and pharmaceuticals. Notably, the deal had reduced US tariffs on South Korean cars from a previous 25%.
Economic implications
Potential impact of Trump's tariff hike
If Trump's latest threat is carried out, it would reverse the terms of the trade and security deal. The auto industry makes up 27% of South Korea's exports to the US, which accounts for nearly half of its car exports. A return to a higher tariff level could also put South Korean exports at a disadvantage against countries like Japan and EU members that have negotiated lower tariffs with America.
Trade tensions
Trump's recent tariff threats against trading partners
The threat against South Korea is not an isolated case. Over the weekend, Trump warned Canada of a 100% tariff on all goods crossing the border if it signs a trade deal with China. Earlier in January, he threatened to impose tariffs on several European countries until his Greenland purchase was approved. However, he has since backed off from that threat.