Trump Escalates Trade War with 25% Tariffs on South Korean Imports
US President Donald Trump has threatened to impose 25% tariffs on South Korean imports, escalating trade tensions with one of America's key Asian allies and marking another aggressive use of economic leverage in his foreign policy strategy.The tariff increase, announced via social media, would affect a broad range of Korean exports including automobiles, lumber, pharmaceuticals, and other products currently subject to 15% duties. Trump accused Seoul of "not living up" to a trade agreement reached in October 2023, citing delays in parliamentary approval."South Korean lawmakers have been slow to approve the deal while we have acted swiftly to reduce our tariffs in line with the transaction agreed to," Trump stated, employing his characteristic capitalization for emphasis on "TARIFFS" and other key terms.Seoul responded swiftly, stating it had received no official notification of the tariff decision and requesting urgent discussions with Washington. Industry Minister Kim Jung-kwan, currently in Canada, will travel to Washington to meet with US Commerce Secretary Howard Lutnick as soon as possible, according to Korean officials.The economic implications are substantial. South Korea exported approximately $123 billion worth of goods to the United States last year, making America its second-largest export market after China. Automotive exports alone accounted for roughly $30 billion of this trade volume.Financial markets initially reacted with concern, as shares in Korean automakers Hyundai and Kia fell up to 6% following Trump's announcement. However, both stocks recovered to close only 1% lower, while South Korea's benchmark Kospi index reversed early losses to end 2.7% higher."With a delegation on its way from Seoul to Washington, markets are viewing this latest twist as more carrot than stick," said Derren Nathan, head of equity research at Hargreaves Lansdown. Analysts expressed skepticism about whether the threatened tariffs would materialize, citing Trump's recent reversal on European tariff threats related to Greenland acquisition plans.The disputed agreement, submitted to South Korea's National Assembly on November 26, includes Seoul's commitment to invest $350 billion in the United States, with portions allocated to shipbuilding initiatives. Local media reports suggest parliamentary approval is likely in February 2024.This latest tariff threat exemplifies Trump's broader strategy of using trade policy as a foreign policy instrument. Recent examples include threatening Canada with 100% tariffs over potential China trade deals and proposing import taxes on eight countries, including the United Kingdom, that opposed US plans regarding Greenland.The episode underscores the volatility in US trade relationships under Trump's second administration and highlights the ongoing challenges facing traditional American allies navigating an increasingly transactional approach to international commerce and diplomacy.
