Business & Economics
Trump Raises Tariffs on South Korean Imports to 25% Over Unratified 2025 Trade Framework
On 26-27 Jan 2026, President Donald Trump announced via Truth Social that duties on South Korean autos, lumber, pharmaceuticals and other products will jump from 15 % to 25 % because Seoul’s National Assembly has not yet ratified last year’s $350 billion investment-for-tariff deal.
Focusing Facts
- Trump’s post dated Jan 26, 2026 hikes the tariff ceiling on Korean goods by 10 percentage points—from the 15 % rate that took effect Nov 1 2025 back up to 25 %.
- The stalled July/Oct 2025 framework committed South Korea to invest US$350 billion in U.S. strategic sectors, including US$200 billion cash capped at US$20 billion per year.
- Financial reaction: KOSPI −0.7 %, won −0.5 %, Hyundai Motor −3.5 %, Kia −4.8 % in early Seoul trading on Jan 27.
Context
Trump’s tariff snap-back echoes President Nixon’s unexpected 10 % “import surcharge” of August 1971—both moves were unilateral, sudden and aimed at forcing allies’ economic concessions. Structurally, it reflects a 21st-century drift away from multilateral WTO rules toward personalized, transaction-based “frameworks” that mingle trade policy with inward-investment pledges. By tying tariff relief to a promised US$350 billion cash infusion, Washington is reviving 1930s-style quid-pro-quo economics and the 2020 China ‘Phase One’ purchase targets, signaling that market access is now rented, not granted. The moment matters because the U.S. Supreme Court is reviewing whether the 1977 IEEPA actually lets a president wield tariffs as an open-ended club; if the Court upholds that power, future occupants of the White House—regardless of party—could routinely weaponize 25 % duties, accelerating the century-long erosion of rules-based trade that began with Smoot-Hawley (1930) and intermittently resurfaces whenever domestic politics trump global integration.
Perspectives
South Korean conservative media
e.g., Chosun Ilbo — Portrays the tariff hike as a direct consequence of Seoul’s slow-moving National Assembly, arguing that Trump is using tariffs as political leverage to force South Korea to honor an investment-heavy framework deal. By framing the dispute largely as South Korea’s fault and contrasting it with Japan and the EU, the coverage downplays questions about Trump’s legal authority and unpredictability, aligning with a domestic narrative that criticises the ruling party’s handling of the deal.
International mainstream and wire-service outlets
e.g., CNBC TV18, Mid-Day, The Manila Times — Depict the move as another example of Trump’s erratic, legally contested trade tactics that could roil the global economy and worsen inflation. By emphasising repeated tariff threats, Supreme Court challenges and comparisons to earlier abandoned gambits, these outlets spotlight Trump’s volatility while giving relatively little attention to whether Seoul genuinely delayed implementation of the agreement.
Asian business press focused on market impact
e.g., Nikkei Asia, AsiaOne — Treats the announcement chiefly as a market-moving event, highlighting the hit to Hyundai/Kia shares, the won, and Seoul’s rush to pass a US$350 billion investment bill to avoid higher duties. The market-centric framing can obscure broader political or legal controversies, prioritising investor concerns and quick policy fixes over deeper scrutiny of either side’s motives.