Trump to raise tariffs on South Korea to 25 per cent
US President Donald Trump has said he will increase tariffs on South Korea to 25 per cent, after accusing Seoul of “not living up” to the trade deal reached late last year.
In a Truth Social post on Monday, Trump said the increase would apply to a range of products including lumber, automobiles, pharmaceuticals and “all other reciprocal tariffs”.
Trump said South Korean lawmakers had been to slow to approve the deal, while the US had acted “swiftly” to reduce its tariffs.
Trump wrote: “Our trade deals are very important to America.
“In each of these deals we have acted swiftly to reduce our tariffs in line with the transaction agreed to. We, of course, expect our trading partners to do the same.”
The office of South Korea’s President Lee Jae Myung said it had not been given any official notice or explanation from the US government on its decision to raise tariffs on some of its goods.
Speed up passage of the bill
South Korea’s flagship index, the Kospi, initially fell on Tuesday morning following Trump’s decision but has since recovered 2.73 per cent to 5,084 KRW (£2.74), after the country confirmed it wanted urgent talks with Washington over the issue and shares in major exporters bounced back.
It added that South Korea’s Industry Minister, Kim Jung-kwan, who is currently in Canada, will visit Washington as soon as possible to meet US Commerce Secretary Howard Lutnick.
The president announced last summer he would slash many of his tariffs on South Korea to 15 per cent as part of a deal that would see Seoul pledge $350bn (£256bn) investment to the US, some of which would go towards shipbuilding.
The deal also granted crucial relief to South Korea auto companies with tariffs on cars and car parts cut to 15 per cent, bringing them in line with levies imposed by Trump on both the EU and Japan.
The agreement was reached last October following Trump’s visit to the country.
South Korea confusion and global uncertainty
Trump’s announcement on hiking tariffs caused widespread confusion in South Korea, with its economic and finance ministry trying to understand “the intent” of the statement.
Officials thought Trump may have been referring to a bill proposed in November that would enable the $350bn of investment, but is currently stalled.
Finance minister Koo Yun-cheol will also ask the National Assembly to speed passage of the bill on Tuesday.
Confusion was also heightened by the fact that the deal was contained in a fact sheet and a memorandum of understanding, rather than a formal treaty.
Trump’s latest tariff threat is likely to cause further global unease, following a tumultuous week of Trump threatening e steep levies on eight European countries who opposed US plans to seize Greenland, including the UK, before backing down.
On Saturday, he went on to threaten 100 per cent tariffs on Canada, if it entered a trade deal with China, with Canadian Prime Minister Mark Carney confirming his country was not pursuing a free trade deal with China and had “never” considered it.