In a new escalation of its protectionist trade policy, US President Donald Trump announced his intention to raise tariffs on a wide range of goods and products imported from South Korea, in a surprise decision aimed at pressuring Seoul to accelerate its legislative procedures related to bilateral agreements.
The announcement was made via the Truth Social platform, where Trump explained that tariffs would increase from the current 15% to 25%. The US president justified this decision by citing the South Korean parliament's failure to implement the historic trade agreement between the two countries, stating that this delay was unjustified and detrimental to US economic interests.
In his statement, Trump identified the sectors most affected by the decision, including the automotive, lumber, and pharmaceutical industries, in addition to activating all other reciprocal tariffs. This move comes at a sensitive time for the global economy, as many countries seek to avoid open trade wars with the United States.
Background to trade tensions and the importance of the agreement
To understand the context of this decision, one must examine the history of trade relations between Washington and Seoul. Trump has long criticized the US trade deficit with South Korea, arguing that previous agreements were unfair to American industry. The United States-Korea Free Trade Agreement (KORUS) is the cornerstone of these economic relations, but Washington has repeatedly called for amendments to ensure greater access to the Korean market for American automobiles and agricultural products.
Analysts point out that Trump's linking of tariffs to parliamentary approval reflects his "maximum pressure" strategy in international negotiations, where he uses tariffs as a tool of political and economic leverage to force allies, even more so than adversaries, to make immediate concessions.
Expected economic repercussions
This decision is expected to have significant repercussions for the South Korean economy, which is heavily reliant on exports. The automotive sector, represented by giants like Hyundai and Kia, will be at the forefront of the storm, as the United States is a key market for their vehicles. The increased tariffs to 25% could weaken the competitiveness of Korean cars against their American and Japanese counterparts, potentially leading to a decline in sales and substantial financial losses.
Domestically, this decision could lead to higher prices for goods targeted by American consumers, particularly in the pharmaceutical and automotive sectors, raising concerns about inflation. Regionally, this move sends a strong message to Washington's allies in Asia that security and military alliances do not grant immunity on economic matters, potentially prompting other countries in the region to reassess their trade relationships with the US administration to avoid a similar fate.
