Seoul (AFP) – South Korea’s government on Tuesday held emergency talks after US President Donald Trump said he will raise tariffs on South Korean goods, including autos, lumber, and pharmaceuticals. Trump said Monday that he would raise tariffs on the goods, accusing South Korea of not living up to an earlier trade pact struck with Washington.
South Korea’s presidential office said it had not been officially informed about the tariff hike plans in advance. The increase would bring tariff levels from 15 percent to 25 percent. “South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote on his Truth Social platform. He added that he was increasing tariff rates “because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative.”
On Tuesday, Seoul convened an emergency meeting to hash out a response, with Trade and Industry Minister Kim Jung-kwan, currently in Canada, joining remotely. “Our government intends to convey its commitment to implementing the tariff agreement to the US side, while responding in a calm and measured manner,” Seoul said in a statement. The country added it believed Washington’s “tariff hikes only take effect after administrative steps such as publication in the Federal Register”.
South Korea has said Trade Minister Kim will travel to Washington for talks on the issue with US Commerce Secretary Howard Lutnick. Trump’s apparent about-face comes months after Washington and Seoul struck a trade and security deal, capping a period of tense negotiations. The agreement was finalized after Trump met his South Korean counterpart Lee Jae Myung in October and included investment promises by South Korea alongside tariff cuts by the United States.
Since then, it has remained in something of a legal limbo in South Korea. Seoul’s presidential office insisted in November that the deal does not require parliamentary approval, arguing it represents a memorandum of understanding rather than a binding legal document. Asked whether the tariff deal had been submitted to parliament for approval, a senior official told AFP on Tuesday they were looking into it but did not elaborate.
Under the pact, Washington would maintain levies of up to 15 percent on South Korean goods including vehicles, car parts, and pharmaceuticals. Crucially, the deal’s terms brought US tariffs on South Korean cars down from a 25 percent level. Trump’s latest threat, if enacted, would reverse that.
– Export pain – The auto industry accounts for 27 percent of South Korea’s exports to the United States, which takes in nearly half of the country’s car exports. A reversal to a higher tariff level could also put South Korean exports in a less advantageous position compared with economies like Japan and the European Union, which have both struck deals for a 15 percent US tariff.
The Trump administration has yet to issue formal notices to enact the changes. The US president’s threat targeting South Korea is his latest against key trading partners in recent days. Over the weekend, Trump warned Canada that if it concludes a trade deal with China, he would impose a 100 percent tariff on all goods coming across the border. Earlier in January, Trump also threatened to slap tariffs on multiple European nations until his purchase of Greenland is achieved. He has since backed off the threat.
© 2024 AFP
