Trump's "Tariff Shock": South Korean Goods to Face 25% Levy

President Donald Trump announced on Monday that he is raising tariffs on goods imported from South Korea from 15% to 25%. He cited Seoul's failure to fully implement a bilateral trade agreement as the primary reason for the move, according to CNN.

"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%," Trump wrote in a post on his Truth Social platform.

It remains unclear exactly when the new tariffs will take effect. The White House did not immediately respond to CNN's request for comment.

Seoul plans to "respond calmly" and convey "its willingness to fulfill the tariff agreement" to the U.S., presidential spokesperson Kang Yoo-jung said on Tuesday. Currently, South Korean officials are rushing to arrange in-person meetings with the Trump administration. The country’s trade minister has moved up a scheduled U.S. trip to meet with Trade Representative Jamieson Greer in the coming days. Additionally, the industry minister will visit the U.S. to meet with Secretary of Commerce Howard Lutnick once his current visit to Canada concludes.

The news had an immediate impact on the South Korean stock market. The benchmark Kospi index fell by more than 1%, and shares of the country’s automotive giant, Hyundai, plunged by more than 2.2% as of 9:47 a.m. local time.

According to data from the U.S. Commerce Department, South Korea is one of the United States' top sources of foreign goods. In 2024, the country exported $132 billion worth of goods to the U.S., including cars, auto parts, semiconductors, and electronics. The tariff hike could make these products significantly more expensive for American consumers.

In July, Trump had reached an agreement with South Korea that prevented tariffs from jumping from 10% to 25%. However, Trump's ability to impose broad, country-specific tariffs may be influenced by a landmark case currently before the Supreme Court, which will determine whether he has the legal authority to impose such sweeping measures unilaterally.

This announcement follows a series of recent tariff threats from Trump, including a 100% tariff on Canadian goods and a 10% levy on countries opposed to his Greenland ambitions.