Trump Raises South Korea Tariffs to 25% to Pressure Delayed Investment Bill
Updated (5 articles)
Tariff Increase Announced via Truth Social Targets Key Sectors President Donald Trump posted on Truth Social that reciprocal tariffs on South Korean autos, lumber, pharmaceuticals and other goods will rise from 15% to 25% effective upon implementation, a surprise shift after earlier tariff reductions [1][2][3][4][5]. He framed the move as a swift response to Seoul’s failure to ratify the bilateral trade agreement finalized in October 2025 [1][2]. The announcement did not specify an exact start date, and the White House has offered no comment [2].
Legislative Inaction Delays $350 Billion Investment Commitment The July 30 2025 trade deal, reaffirmed during Trump’s October 29 2025 visit, obliges South Korea to invest up to US$350 billion in the United States, with a 2026 cap of US$20 billion annually [2][4][5]. The agreement also grants U.S. approval for Korean nuclear‑powered submarines and support for civilian uranium enrichment [4][5]. Ratification by the Korean National Assembly is required for the investment and security provisions to take effect, and the pending bill submitted in November remains unpassed [2][4].
U.S. Leverages Tariffs to Accelerate Investment Bill Amid Regulatory Tensions Analysts say the tariff hike is intended to pressure Seoul into passing a special investment bill that would lock in the $350 billion pledge [1][2]. The move coincides with Washington’s criticism of South Korea’s investigation into Coupang’s massive data‑leakage incident and broader digital‑regulation actions, which U.S. officials have labeled “discriminatory” [1][4]. South Korea convened an emergency inter‑agency meeting, and Industry Minister Kim Jung‑kwan was dispatched to Washington for talks with Commerce Secretary Howard Lutnick [1][2].
Legal and Political Risks Highlighted by Pending Supreme Court Review A Supreme Court case will consider whether Trump exceeded authority under the 1977 International Emergency Economic Powers Act when imposing tariffs, a decision that could limit future executive trade actions [3][1]. Economists warn that repeated tariff threats generate market uncertainty and may affect long‑term investment decisions [3]. The tariff escalation follows a broader pattern of using tariffs as leverage against other partners, including recent threats toward Canada and European nations [3].
Sources (5 articles)
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[1]
Yonhap: Trump Raises South Korea Tariffs to 25% Amid Push for Investment Bill: Details the 25% tariff hike, links it to the stalled investment bill, cites expert urgency before a Supreme Court ruling, and notes diplomatic steps by Seoul .
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[2]
Yonhap: Trump Raises South Korea Tariffs to 25% Over Legislative Delay: Emphasizes the legislative delay as the trigger, outlines the $350 billion investment terms, and describes the emergency diplomatic response .
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[3]
Newsweek: Trump Announces 25% Tariffs on South Korean Imports: Highlights the use of emergency powers, warns of market uncertainty, and connects the move to a pending Supreme Court case on tariff authority .
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[4]
Yonhap: Trump raises South Korean tariffs to 25% amid trade‑deal delays: Restates the tariff increase, recaps the original 15% deal, the investment pledge, nuclear submarine support, and U.S. concerns over the Coupang probe .
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[5]
Yonhap: Trump Raises South Korean Tariffs to 25% Over Unapproved Trade Deal: Focuses on the surprise nature of the announcement, the sectors affected, and the broader U.S. strategy of matching tariff cuts after securing deals .
Timeline
July 30, 2025 – The United States and South Korea sign a historic trade agreement that lowers reciprocal tariffs to 15 % and obligates Seoul to invest up to US $350 billion in the United States, with an annual cap of US $20 billion for 2026; the deal also secures U.S. approval for Korean nuclear‑powered submarines and civilian uranium enrichment. [4]
Oct 29, 2025 – President Trump publicly reaffirms the July 30 deal during a state visit to Seoul, stressing the “great deal” and the mutual benefits for both economies. [5]
Nov 2025 – South Korea’s ruling Democratic Party submits a special bill to the National Assembly to ratify the trade pact; a fact sheet released that month outlines the investment commitments and the security provisions. [2]
Jan 20, 2026 – Trump holds a White House briefing (photographed by AFP) that focuses on trade policy, signaling the administration’s continued emphasis on leveraging trade agreements. [5]
Early Jan 2026 – In the week before the South Korea tariff move, Trump threatens a 100 % tariff on Canadian goods if Canada expands trade with China and warns eight European nations over a demand for U.S. control of Greenland, illustrating his broader use of tariffs as bargaining chips. [1]
Jan 26, 2026 – President Trump posts on Truth Social that reciprocal tariffs on South Korean autos, lumber, pharmaceuticals and other goods rise from 15 % to 25 %, calling the action a “swift response” and accusing Seoul of “not living up to its Deal with the United States.” [5][1]
Jan 26, 2026 – The South Korean government convenes an emergency inter‑agency meeting; Industry Minister Kim Jung‑kwan is dispatched from Canada to Washington for talks with Commerce Secretary Howard Lutnick, while Prime Minister Kim Min‑seok raises the Coupang data‑leak probe with U.S. Vice President JD Vance. [2][3][4]
Jan 26, 2026 – U.S. lawmakers and the State Department label Seoul’s investigation of U.S.-listed e‑commerce firm Coupang as “discriminatory” and voice “significant concerns” that the probe could harm U.S. businesses, adding political pressure to the tariff dispute. [4][2]
Jan 26, 2026 – Economists warn the tariff hike could heighten market uncertainty, and legal analysts note a pending Supreme Court case on whether Trump exceeded his authority under the 1977 International Emergency Economic Powers Act, a decision that could curb future executive tariff powers. [1][3]
2026 (ongoing) – The United States expects South Korea to pass the investment‑bill quickly; the 25 % tariffs remain in effect until the National Assembly ratifies the agreement, and the Supreme Court’s ruling on the IEEPA case is anticipated later in the year, potentially reshaping U.S. trade‑policy tools. [2][3]