South Korea Sends Ministers to Washington While Pushing February Investment Bill Amid 25% U.S. Tariff Threat

Updated 2026-01-27 10:11:19+00:00 (28 articles)

Trump’s 25% tariff hike announced without formal U.S. notice President Donald Trump used a social‑media post on Jan 26 to raise reciprocal and auto duties on South Korean goods from 15% to 25%, targeting autos, lumber, pharmaceuticals and other products [6][16][20]. The South Korean presidential office confirmed it has not received any official notice or explanation from Washington [1][10][17][19]. The increase will only become effective after U.S. administrative steps, such as a Federal Register notice, are completed [1][10][11][16].

Seoul convenes inter‑agency meeting and dispatches senior ministers National Security Adviser Wi Sung‑lac and policy chief Kim Yong‑beom co‑chaired an emergency inter‑agency session to map a calm diplomatic response [1][10][11][17]. Industry Minister Kim Jung‑kwan, then in Canada for a submarine‑bid mission, will travel to Washington to meet Commerce Secretary Howard Lutnick [1][2][7][12][15][16][17][19]. Trade Minister Yeo Han‑koo is slated to meet USTR head Jamieson Greer to discuss the tariff move and the pending trade framework [1][2][6][7][12][15][16][17][19].

Special $350 bn investment bill moves toward February debate The ruling Democratic Party submitted a special bill in November to fund South Korea’s $350 billion investment pledge under the October trade deal, and it plans to launch parliamentary deliberations in February [3][4][5][14][15][18][19]. The DP seeks bipartisan cooperation, while the opposition People Power Party urges ratification of the trade agreement before the bill proceeds [4][5][14]. Finance‑committee reviews and a planned meeting with the parliamentary finance chair aim to secure passage before the end of February [15][18].

Markets rebound and ancillary developments underscore volatility Despite the tariff threat, the Kospi surged 2.7% to 5,084.85, driven by strong tech stocks such as Samsung (+4.9%) and SK Hynix (+8.7%) [2][3][8][13]. The index later dipped over 1% before recovering, reflecting investor uncertainty [8][13]. Meanwhile, China began dismantling a steel platform in the Yellow Sea, and a Seoul court approved a live broadcast of former first lady Kim Keon Hee’s trial verdict [3]. Analysts note the tariff announcement may be linked to Seoul’s digital‑regulation probe of Coupang and broader U.S. pressure [1][14][16].

Sources (20 articles)

Timeline

Jul 30 2025 – The United States and South Korea sign a strategic trade and investment agreement that caps U.S. tariffs on Korean autos at 15 % and links a $350 billion Korean investment pledge to the deal [21].

Oct 29 2025 – President Trump reaffirms the July agreement during a summit in Seoul, emphasizing U.S. support for Korean nuclear‑powered submarines and urging swift legislative ratification [21].

Nov 13 2025 – Seoul and Washington release a joint fact sheet outlining the $350 billion investment commitment, the 15 % reciprocal tariff rate, and security provisions such as submarine approval [18].

Nov 26 2025 – South Korea’s ruling Democratic Party submits a special investment bill to the National Assembly to enact the $350 billion pledge, initiating a multi‑bill legislative process [27].

Dec 1 2025 – The United States lowers its tariff on Korean automobiles from 25 % to 15 %, applying retroactively to Nov 1, as part of the trade deal’s implementation [28].

Dec 3 2025 – The U.S. Office of the USTR and the Department of Commerce post a Federal Register notice implementing the 15 % auto duty and extending the same rate to Korean aircraft parts and lumber, cementing the reciprocal tariff framework [27][25].

Dec 3 2025 – The Federal Register notice also confirms the 15 % duty on Korean autos is retroactive to Nov 1, reducing costs for Korean exporters and signaling the deal’s activation [24][26].

Jan 26 2026 – President Trump announces via Truth Social that reciprocal tariffs and auto duties on South Korean goods rise from 15 % to 25 %, accusing Seoul of “not living up” to the trade framework [21].

Jan 26 2026 – South Korean markets react sharply: the Kospi falls more than 1 % before rebounding, while Hyundai shares drop over 2 % as investors price in higher export costs [2].

Jan 26 2026 – A pending Supreme Court case challenges the president’s authority under the 1977 International Emergency Economic Powers Act to impose sweeping, country‑specific tariffs, potentially blocking the 25 % rates [2].

Jan 26 2026 – Industry Minister Kim Jung‑kwan, then in Canada, prepares to travel to Washington to meet Commerce Secretary Howard Lutnick, and Trade Minister Yeo Han‑koo schedules a meeting with USTR Jamieson Greer to discuss the tariff hike [11].

Jan 27 2026 – The South Korean presidential office confirms it has received no formal U.S. notice of the tariff increase, highlighting a communication gap between the governments [20].

Jan 27 2026 – National Security Adviser Wi Sung‑lac and policy chief Kim Yong‑beom co‑chair an emergency inter‑agency meeting to map Seoul’s response, emphasizing a calm, procedural approach [14].

Jan 27 2026 – Cheong Wa Dae publicly reaffirms South Korea’s commitment to implement the October trade pact and notes the tariff hike will only take effect after a Federal Register notice is issued [14].

Jan 27 2026 – The ruling Democratic Party announces it will launch parliamentary deliberations on the special investment bill in February, aiming to pass the measure before the end of the month [9].

Jan 27 2026 – The DP seeks bipartisan cooperation, urging the opposition People Power Party to support the February review and passage of the $350 billion investment bill [10].

Jan 27 2026 – Despite the tariff threat, the Korea Composite Stock Price Index closes above 5,000 points, driven by strong tech stocks and a 2.73 % gain [8].

Jan 27 2026 – Asian equities rise, with Japan’s Nikkei 225 up 0.9 % and South Korea’s Kospi surging 2.7 % to 5,084.85, reflecting broader market optimism amid U.S. profit reports [5].

Jan 27 2026 – China begins dismantling a steel management platform in the Yellow Sea, a move tied to ongoing maritime infrastructure talks with South Korea [8].

Jan 27 2026 – The Seoul Central District Court permits a live broadcast of former first‑lady Kim Keon Hee’s trial verdict, underscoring heightened public interest in the case [8].

Jan 27 2026 – Former Prime Minister Lee Hae‑chan’s body is repatriated from Vietnam to Seoul, prompting a state funeral and political tributes [12].

Jan 27 2026 – President Lee Jae Myung pledges to curb real‑estate capital inflows, end tax breaks for multiple‑home owners, and boost housing supply to mitigate asset‑bubble risks [12].

Jan 27 2026 – South Korea’s Ministry of Economy and Finance meets with the parliamentary finance committee chair to seek cooperation on the investment bill, reinforcing diplomatic outreach to Washington [16].

Jan 27 2026 – Industry Minister Kim Jung‑kwan finalizes arrangements to meet Commerce Secretary Lutnick in Washington, aiming to clarify the tariff issue and preserve trade ties [11][16].

Jan 27 2026 – Analysts note that the tariff hike serves as pressure to accelerate the pending investment bill and may be linked to U.S. concerns over Seoul’s digital‑regulation probe of Coupang [13].

Jan 27 2026 – The administration’s broader tariff strategy includes recent threats of a 100 % duty on Canadian goods and pressure on eight European nations over Greenland, illustrating a pattern of using tariffs for geopolitical leverage [1].