Seoul legislators are discovering that President Trump’s commerce settlement got here with implementation deadlines not within the positive print. By Stewart Burnett
US President Donald Trump introduced on 26 January that he would enhance tariffs on South Korean imports to 25% from 15%, accusing the nation’s legislature of failing to enact a commerce deal the 2 international locations struck in 2025. The abrupt reversal impacts automotive and a variety of different items coated below Trump’s “reciprocal” tariff framework.
President Trump and South Korean President Lee Jae Myung reached the framework deal in July 2025, with closing phrases confirmed throughout Trump’s go to to Seoul the next October. As a part of the settlement, South Korea pledged to take a position US$350bn in US strategic sectors in alternate for decreased tariffs, together with a minimize from 25% to fifteen% on autos and automotive components that took impact on 1 November.
A part of the nation’s efforts to courtroom a beneficial US deal got here within the type of main investments from Hyundai, which introduced US$21bn in American strategic investments in March 2025. It must be famous that a few of this cash had already been allotted beforehand. In August it raised the funding sum to US$28bn by means of 2028, allocating the extra funds to bolster car, metal and robotics-heavy manufacturing.
Seoul’s presidential workplace confirmed on 27 January that it had acquired no official notification of the tariff enhance and expressed confusion about what particularly prompted Trump’s announcement. South Korea’s commerce minister, at present located in Canada, will journey to Washington for conferences with Commerce Secretary Howard Lutnick. In the meantime, Seoul is scrambling to know whether or not Trump was referring to a November invoice enabling the US$350bn funding package deal that at present stays stalled in parliament.
Shares in Hyundai Motor and Kia initially plunged by 4.8% and 6% respectively within the wake of Trump’s submit on Reality Social, earlier than recovering to commerce modestly larger. Automotive exports to the US totalled US$30.2bn in 2025, representing 25% of South Korea’s shipments to the nation. In-keeping with broader developments across the results of Trump’s tariffs on commerce, this marked a 13.2% decline from 2024.
Because it stands, the deal between the US and South Korea contains a handshake, a factsheet and a memorandum of understanding reasonably than any sort of formal treaty requiring parliamentary ratification. Seoul’s presidential workplace insisted in November that the association didn’t want legislative approval, but Trump’s grievance centres exactly on the legislature’s failure to behave. A basic disagreement now brews over what constitutes implementation of an settlement that neither aspect seems to have formalised correctly.
For these anticipating commerce stability in 2026, the Trump administration’s actions in January seem to have provided a impolite awakening. South Korea now joins a rising checklist of allies going through unstable commerce coverage this month, following 100% tariff threats towards Canada and levies threatened towards eight EU nations over the way forward for Greenland.
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