Legal and political uncertainty continues to surround US trade policy as the Supreme Court weighs a challenge to President Donald Trump’s authority to impose tariffs without congressional approval. Justices heard arguments in November and questioned whether the president can unilaterally levy such duties. A ruling has yet to be issued.
The latest escalation comes as South Korea remains a major US trading partner. American imports from the country reached $131.6 billion in 2024, according to the Office of the US Trade Representative, making Seoul one of Washington’s largest sources of foreign goods.
Last summer, Trump announced a trade agreement that lowered a previously threatened tariff rate. Under that deal, imports from South Korea would face a blanket 15% levy, down from the higher level Trump had warned of earlier in July. He also said South Korea agreed to “give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, as President.”
On Monday, Trump said that agreement has stalled due to inaction by South Korea’s legislature, prompting him to raise tariffs on autos, pharmaceuticals and lumber from 15% to 25%.
“South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote on Truth Social.
“President Lee [Jae Myung] and I reached a Great Deal for both Countries on July 30, 2025, and we reaffirmed these terms while I was in Korea on October 29, 2025. Why hasn’t the Korean Legislature approved it?” he added.
“Because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative, I am hereby increasing South Korean TARIFFS on Autos, Lumber, Pharma, and all other Reciprocal TARIFFS, from 15% to 25%.”
Markets reacted quickly to the announcement. Shares of Hyundai Motor, the largest importer of South Korean vehicles into the US, fell as much as 4.77% before trimming losses to trade down 0.81%. Kia shares dropped nearly 3.5%, while Hyundai Mobis slid about 5%, according to Reuters.
South Korean officials appeared caught off guard. Reuters reported that the presidential Blue House said Washington had not formally notified Seoul of the tariff increase. A senior presidential adviser was expected to convene a meeting with relevant ministries to discuss possible responses.
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