US Increases Tariffs on South Korean Imports Amid Investment Delays

President Donald Trump revealed on Tuesday that the US and South Korea aim to find common ground following his unexpected move to boost tariffs on South Korean imports to 25%. When pressed on the tariff increase, Trump noted, "We'll work something out with South Korea," but did not elaborate further.

U.S. chief trade negotiator, Jamieson Greer, mentioned that the tariff rate had dropped from 25% to 15% in exchange for South Korea’s pledge of a $350 billion investment in the U.S., increased market access for American vehicles, and the elimination of certain trade barriers. However, Greer pointed out that South Korea has yet to implement the necessary legislation to fulfill these obligations.

Trump indicated via social media on Monday that the tariff hike stems from South Korea’s parliament not adhering to last year’s agreement with its president. This sudden move has caused concern among officials in Seoul, who are now scrambling to address a potential economic downturn for their export-driven economy.

Greer emphasized the expanding U.S. trade deficit with South Korea, which has ballooned to $65 billion during the Biden administration, describing it as "unsustainable." South Korea’s parliament is anticipated to delay voting on the necessary bills until February, with five legislative proposals regarding the U.S. investment package still pending approval by the country’s ruling party.

Additionally, the U.S. has voiced concerns about South Korean regulations impacting digital services and online platforms, fearing they might disadvantage U.S. firms. Speculations suggest that recent regulatory actions against Coupang, a U.S.-listed South Korean firm, could have influenced the tariff decision, although South Korea’s Foreign Minister has denied any direct linkage.

Earlier this month, South Korea’s Finance Minister announced that the investment package is set to launch soon, but issues such as an impending U.S. Supreme Court ruling on tariffs and a depreciating Korean won could delay implementation until after mid-2026.