U.S. Pressures South Korea as Treasury Secretary Says Deal Awaits Ratification
Updated (6 articles)
Tariff Increase Announced After Legislative Stalemate President Donald Trump posted on Truth Social on Jan 26 that reciprocal tariffs on South Korean autos, lumber and pharmaceuticals will rise from 15 % to 25 % [4][5][6]. He framed the move as a response to the National Assembly’s failure to approve the bilateral trade pact [4]. The hike applies to all sectors previously covered by the agreement and will take effect pending further notice [5]. Earlier in the year the United States had lowered its own tariffs to 15 % under the same deal [4].
Deal Demands $350 Billion Korean Investment The agreement, signed on July 30 2025 and reaffirmed on Oct 29 2025, obliges Seoul to invest up to $350 billion in the United States, with an annual ceiling of $20 billion for 2026 [4][5]. In return, Washington reduced reciprocal tariffs on Korean goods to 15 % and granted approval for nuclear‑powered submarines and civilian nuclear fuel rights [4][5]. The investment pledge is a central incentive for the trade and security components of the pact [5].
South Korean Parliament Yet to Ratify Agreement South Korea’s ruling Democratic Party submitted a special bill in November to enable the $350 billion investment, but the National Assembly has not passed it [1][2]. Finance Minister Koo Yun‑cheol announced an “active explanation” strategy to persuade lawmakers and highlighted ongoing communication with the legislature [2]. Treasury Secretary Scott Bessent told CNBC that no trade deal exists until ratification, and Industry Minister Kim Jung‑kwan is scheduled to meet U.S. Commerce Secretary Howard Lutnick in Washington [1].
U.S. Cites Coupang Probe and Currency Weakness White House official warned that Seoul has made no progress on its obligations, linking the tariff increase to the stalled legislation [3]. The official also cited U.S. concerns about a massive data breach at Coupang Inc. and the weakness of the Korean won, which could impede the pledged investment [3]. These issues were presented as additional pressure points beyond the tariff dispute [3].
Trump Signals Willingness to Negotiate Despite the tariff threat, President Trump told reporters that the United States “will work something out” with South Korea, indicating possible de‑escalation [2]. Treasury Secretary Bessent suggested that the 25 % rate might motivate faster legislative action [1]. Finance Minister Koo reiterated cooperation with the National Assembly and emphasized continued dialogue to resolve the impasse [2].
Sources
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1.
Yonhap: U.S. Treasury Secretary Says Trade Deal With South Korea Awaits Ratification: Treasury Secretary Scott Bessent tells CNBC the pact remains inactive until parliamentary ratification, notes Trump’s 25 % tariff threat, and mentions upcoming talks between Industry Minister Kim Jung‑kwan and Commerce Secretary Howard Lutnick.
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2.
Yonhap: South Korea Vows Active Explanation as U.S. Threatens Tariff Increase: Finance Minister Koo Yun‑cheol pledges to actively explain Seoul’s commitment, highlights the stalled special bill, and reports Trump’s openness to a negotiated solution while reaffirming the $350 billion investment pledge.
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3.
Yonhap: White House official says South Korea made “no progress” on trade deal: A White House official claims Seoul has not met its obligations, cites the 25 % tariff hike, the $350 billion investment requirement, and raises concerns about the Coupang data breach and a weak won.
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4.
Yonhap: Trump Raises South Korea Tariffs to 25% Over Legislative Delay: President Trump announces the tariff increase via Truth Social, attributes it to the National Assembly’s failure to approve the July‑2025 agreement, and outlines the deal’s investment and security components.
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5.
Yonhap: Trump raises South Korean tariffs to 25% amid trade‑deal delays: The article details the tariff hike, the original 15 % rate, the $350 billion investment commitment, and adds that the deal includes nuclear‑powered submarine approval and concerns over the Coupang investigation.
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6.
Yonhap: Trump Raises South Korean Tariffs to 25% Over Unapproved Trade Deal: Focuses on Trump’s Truth Social announcement, the 25 % tariff across sectors, the justification of an unratified deal, and places the move within the administration’s broader leverage strategy.
Timeline
July 30, 2025 – The United States and South Korea sign a historic bilateral trade agreement that lowers U.S. tariffs on Korean autos, lumber and pharmaceuticals to 15 % and obliges Seoul to invest up to $350 billion in the United States, while also securing U.S. approval for Korean nuclear‑powered submarines and civilian nuclear‑fuel rights [5][6].
Oct 29, 2025 – President Donald Trump publicly reaffirms the July deal during his visit to Seoul, emphasizing the “Great Deal” and the mutual expectations for tariff reductions and investment commitments [5][6].
Nov 2025 – South Korea’s ruling Democratic Party submits a special bill to the National Assembly to facilitate the $350 billion investment and implement the trade pact, but the legislation remains pending [1][2].
Jan 20, 2026 – A White House briefing shows President Trump discussing trade policy, underscoring the administration’s focus on enforcing reciprocal tariff reductions [6].
Jan 26, 2026 – President Trump announces via Truth Social that the United States will raise reciprocal tariffs on South Korean autos, lumber, pharmaceuticals and other goods from 15 % to 25 %, citing the Korean legislature’s failure to ratify the trade agreement [5][6].
Jan 27, 2026 – A White House official tells Yonhap that South Korea has made “no progress” on fulfilling its obligations under the deal, reinforcing the rationale for the tariff hike [3].
Jan 27, 2026 – The South Korean government convenes an emergency inter‑agency meeting and orders Industry Minister Kim Jung‑kwan, then in Canada, to travel to Washington for talks with U.S. Commerce Secretary Howard Lutnick to address the tariff increase and keep the deal on track [4][3].
Jan 28, 2026 – Treasury official Scott Bessent states, “There is no trade deal until they ratify it,” emphasizing that the agreement remains inactive until the National Assembly approves it and suggesting the 25 % tariffs could spur legislative action [1].
Jan 28, 2026 – Finance Minister Koo Yun‑cheol pledges an “active explanation” to the United States on South Korea’s commitment to the tariff agreement and urges the National Assembly to cooperate on the pending investment bill [2].
Future (2026) – Industry Minister Kim Jung‑kwan is scheduled to meet U.S. Commerce Secretary Howard Lutnick in Washington to discuss the tariff dispute and seek a path forward for ratification of the trade pact [1].