ASIATODAY.ID, WASHINGTON – US President Donald Trump has abruptly raised tariffs on key South Korean imports to 25%, escalating trade tensions with one of Washington’s closest Asian allies after Seoul failed to ratify what Trump called a “historic” trade and investment agreement.
The new tariffs—up from 15%—target major South Korean exports, including automobiles, lumber, and pharmaceuticals, and were announced Monday via Trump’s Truth Social account.
Trump directly blamed South Korea’s National Assembly for stalling the deal, which he finalized with President Lee Jae Myung in October 2025.
“President Lee and I reached a Great Deal for both Countries… Why hasn’t the Korean Legislature approved it?” Trump wrote, adding that the US had already fulfilled its commitments while Seoul had not.
$350 Billion Deal Triggers Political Standoff in Seoul
At the heart of the dispute is an agreement first unveiled in July 2025, under which Washington agreed to cut tariffs from 25% to 15% in exchange for sweeping South Korean concessions—including a $350 billion investment pledge in the United States.
However, the deal has since become mired in political and economic controversy in Seoul. Lawmakers have raised concerns over the scale and structure of the investment, delaying ratification and prompting Trump’s retaliatory move.
South Korea’s presidential office said it had not yet received formal notice from Washington, but confirmed that the country’s trade minister will travel to the US for urgent talks aimed at defusing the crisis.
Warnings of a Liquidity Crisis
President Lee Jae Myung has publicly warned that meeting the investment demand—especially if required in cash—could trigger a severe liquidity crunch, drawing comparisons to the 1997 Asian Financial Crisis, when South Korea nearly exhausted its foreign reserves and was forced to seek an IMF bailout.
Those warnings have fueled resistance in parliament, where critics argue the deal risks undermining financial stability in exchange for short-term trade relief.
America First, Again
The move against South Korea fits squarely into Trump’s revived “America First” trade strategy, which relies on steep tariffs as leverage to extract large-scale investment commitments from allies and rivals alike.
Similar pressure tactics have been applied to the European Union, which has pledged $600 billion in US investments and $750 billion in American energy purchases.
Last week, however, the European Parliament froze approval of the deal, citing Trump’s “continued and escalating threats”—including his controversial remarks about annexing Greenland.
With tariffs now back on the table, analysts warn that Trump’s hardline approach risks turning economic diplomacy into a high-stakes game—one that could rattle markets well beyond Asia. (RT)
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