Post by : Meena Ariff

President Donald Trump announced on Tuesday that the United States and South Korea will work toward a solution following his unexpected decision to increase tariffs on imports from South Korea to 25%. When asked about the tariff hike, Trump said, "We'll work something out with South Korea," but did not provide further details.

According to the U.S. chief trade negotiator, Jamieson Greer, the tariff rate had previously been lowered from 25% to 15% in return for South Korea's promise to invest $350 billion in the U.S., allow greater access for American cars, and remove some trade barriers. However, Greer pointed out that South Korea has yet to pass the necessary legislation to fulfill these commitments.

Trump stated on social media Monday that the increase in tariffs was due to South Korea’s parliament not honoring the agreement made last year with its president. This surprise move unsettled officials in Seoul, who are now rushing to respond to a potential economic setback for the export-driven nation.

Greer also highlighted the growing U.S. trade deficit with South Korea, which reached $65 billion during the Biden administration, calling it "unsustainable." South Korea’s parliament is not expected to vote on the relevant bills until February. Five bills related to the U.S. investment package remain pending, with South Korea's ruling party hoping to approve them soon.

Additionally, the U.S. has raised concerns over South Korean laws tightening regulation on digital services and online platforms, fearing these may unfairly target U.S. companies. Some speculate that recent actions against Coupang, a U.S.-listed Korean company, might have influenced the tariff decision, though South Korea’s Foreign Minister denied a direct connection.

South Korea’s Finance Minister said earlier this month that the investment package is planned to begin soon, but factors like a pending U.S. Supreme Court ruling on tariffs and the weak Korean won might delay the start until after mid-2026.

#Global News #Business News #World News #Trade