Donald Trump has held South Korea accountable with an ultimatum of 25% tariffs on major exports, citing failure to implement a trade agreement from last year. The president’s announcement blamed Korea’s legislature for not ratifying the bilateral deal.
The trade and security agreement was celebrated as a breakthrough when finalized between Trump and South Korean President Lee Jae Myung in October 2024. However, the deal has since become mired in South Korean domestic political disputes about implementation.
South Korea’s government maintains it received no advance warning of Trump’s tariff threat through official diplomatic channels. Officials are scrambling to respond, dispatching the trade minister to Washington while working with parliamentary leaders to expedite relevant legislation.
The automotive sector faces the most significant exposure to potential tariff increases, as it accounts for 27% of South Korean exports to the United States. Market volatility following Trump’s announcement reflected investor concern.
This tariff threat fits within Trump’s broader pattern of using trade policy as diplomatic leverage. The Atlantic Council’s international economics chair notes that even threats that aren’t implemented create market uncertainty with real economic consequences.
Trump Holds South Korea Accountable with 25% Tariff Ultimatum
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