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South Korea Counters Trump’s 25% Tariff Threat with Diplomatic Push and Investment‑Bill Drive

Updated (49 articles)

Tariff hike announced without formal U.S. notice President Donald Trump posted that reciprocal tariffs and auto duties on South Korean goods will rise from 15% to 25%, citing the National Assembly’s failure to ratify the October trade pact. Seoul’s presidential office confirmed it has not received any official notice or explanation from Washington, prompting an emergency inter‑agency meeting chaired by National Security Adviser Wi Sung‑lac and policy chief Kim Yong‑beom. The meeting emphasized a measured, calm response while outlining diplomatic steps. [1][10][18][20]

Industry and trade ministers dispatched to Washington Industry Minister Kim Jung‑kwan, currently in Canada, and Trade Minister Yeo Han‑koo are slated to meet U.S. Commerce Secretary Howard Lutnick and USTR head Jamieson Greer, respectively, to convey Seoul’s commitment to the pending deal and discuss the tariff increase. Both ministers will travel within days, joining a special delegation that also coordinates with the finance ministry on the $350 billion investment pledge. Their visits aim to smooth friction and secure a clear timeline for the agreement’s implementation. [1][2][7][12][14][16][19]

Democratic Party accelerates special investment bill The ruling Democratic Party announced February deliberations on a special bill designed to unlock the $350 billion investment package promised under the trade pact. The bill, submitted in November, seeks bipartisan support from the opposition People Power Party and addresses financing and commercial‑viability concerns. Analysts view the tariff threat as pressure to pass the legislation before a pending Supreme Court case could limit Trump’s tariff authority. [4][5][15][17][19][20]

Markets react but show resilience amid broader tensions South Korea’s KOSPI jumped 2.7% to a record 5,084.85 on Tuesday, driven by strong tech stocks such as Samsung and SK Hynix, even as Hyundai and Kia fell modestly. Asian equities overall rose, with Japan’s Nikkei up 0.9% and Hong Kong’s Hang Seng gaining 1.3%. Concurrently, China began dismantling a steel platform in the Yellow Sea, and a Seoul court approved live broadcasting of former first‑lady Kim Keon Hee’s trial verdict, highlighting the multifaceted domestic backdrop. [2][3][8][9][14]

Sources (20 articles)

Timeline

July 2025 – The United States and South Korea sign a trade agreement that caps tariffs at 10 % on Korean automobiles and grants preferential rates, a deal President Trump later calls the “Great Deal” reached on July 30, 2025 [3][16].

October 2025 – Presidents Lee Jae‑Myung and Donald Trump finalize a bilateral trade‑and‑investment pact at a summit in Gyeongju, pledging a US $350 billion Korean investment in the United States and setting reciprocal tariffs at 15 % for autos, lumber, aircraft and other goods [25][30][1].

November 26, 2025 – South Korea’s National Assembly submits a special bill to enact the $350 billion investment commitment, a prerequisite for the tariff reductions agreed in the October pact [1][30].

December 1, 2025 – U.S. Commerce Secretary Howard Lutnick announces on X that the 25 % tariff on Korean automobiles is reduced to 15 % retroactive to Nov 1, aligning Korea’s reciprocal rate with Japan and the EU and noting the investment pledge “strengthens the U.S. partnership” [30].

December 3, 2025 – The U.S. Office of the U.S. Trade Representative and the Department of Commerce post a Federal Register notice implementing the 15 % duty on Korean autos, aircraft parts and lumber, and confirming the $350 billion investment tie‑in [28][27][29].

January 14, 2026 – President Trump signs a proclamation imposing a 25 % tariff on Nvidia’s H200 and AMD’s MI325X AI chips, invoking Section 232 national‑security authority and stating that imports used to build the U.S. tech supply chain will be exempt [4].

January 15, 2026 – The Commerce Department announces that tariffs on Taiwanese goods fall to 15 % after Taiwan pledges at least $250 billion in direct U.S. semiconductor investments, with the Taiwanese government offering up to $250 billion in financing; Secretary Lutnick says the agreement “helps the U.S. become self‑sufficient” in chips [2][21][22].

January 16, 2026 – A senior U.S. official says Washington will negotiate “separate” semiconductor tariff agreements with individual countries, signaling a shift from a universal standard after the Taiwan pact [18][19][20].

January 17, 2026 – The administration reiterates the country‑by‑country approach, noting that the Taiwan‑U.S. chip‑levy deal does not set a template for other partners and warning that a second‑stage tariff could target additional semiconductors [17].

January 26, 2026 – President Trump posts on Truth Social that reciprocal and auto tariffs on South Korean goods rise from 15 % to 25 % because the Korean legislature has not ratified the October trade framework, describing the move as a “swift response” to Seoul’s inaction [16][11][13].

January 27, 2026 – South Korea’s presidential office says it has received no formal U.S. notice of the tariff hike, convenes an inter‑agency meeting led by chief of staff Kim Yong‑beom, and announces that Industry Minister Kim Jung‑kwan and Trade Minister Yeo Han‑koo will travel to Washington to meet Commerce Secretary Howard Lutnick and USTR Jamieson Greer [14][8][9][10][12].

January 27, 2026 – The ruling Democratic Party schedules deliberations on a special investment bill next month to fulfill the $350 billion pledge, while the KOSPI closes above 5,000 points, buoyed by tech stocks despite the tariff threat [7][6].

February 2026 (expected) – South Korea anticipates that the special investment bill will pass the National Assembly, satisfying the condition tied to the U.S. tariff relief [1].

2026 Supreme Court (pending) – A pending Supreme Court case on the president’s authority under the 1977 International Emergency Economic Powers Act could block the 25 % South Korean tariffs if the Court rules against the administration [3][5][11].

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