Trump Raises US Tariffs on South Korea Imports to 25%
US President Donald Trump has announced a significant increase in tariffs on South Korean imports, raising them to 25%. This decision follows accusations that South Korea is not living up to a trade deal finalized last year.
Key Points of the Tariff Increase
– Rate Increase: Tariffs will rise from 15% to 25% on various goods, including automobiles, lumber, and pharmaceuticals, as well as all other Reciprocal TARIFFS.
– Trade Deal Critique: Trump expressed dissatisfaction with the pace at which South Korean lawmakers have approved the trade agreement, stating, we have acted swiftly to reduce our TARIFFS in line with the Transaction agreed to.
– Response from South Korea: The South Korean government claims it was not given official notification regarding the tariff hike. They have requested urgent discussions with Washington on the matter. Industry Minister Kim Jung-kwan, currently in Canada, plans to visit Washington for talks with US Commerce Secretary Howard Lutnick.
– Market Reaction: Following the announcement, South Korea’s benchmark Kospi stock index initially dropped but later rebounded, showing a 1.8% increase as shares of major exporters recovered.
Historical Context of the Trade Agreement
– In October, Seoul and Washington reached a deal that included a commitment from South Korea to invest $350 billion (£256 billion) in the US, with funds allocated for shipbuilding among other sectors.
– The following month, the agreement indicated that the US would reduce tariffs on specific products once South Korea initiated the approval process. This proposal was submitted to South Korea’s National Assembly on November 26 and is expected to be passed in February.
Impact of Tariffs
– The increase in tariffs means that US companies will now incur a 25% tax on goods imported from South Korea, which may affect pricing and availability of these products in the US market.
– Trump has historically leveraged tariffs as a tool for foreign policy during his presidency. Recently, he threatened Canada with a 100% tariff if it engaged in a trade deal with China, highlighting his approach to international trade negotiations.
Additional Tariff Developments
– Trump has also indicated plans to impose import taxes on eight countries, including the UK, in response to opposition regarding US interests in Greenland.
– Although he later retracted the Greenland tariff threat, the situation escalated tensions between the US and its NATO allies.
In conclusion, Trump’s decision to raise tariffs on South Korean imports to 25% reflects ongoing frustrations with trade compliance and serves as a continuation of his aggressive tariff strategy. As discussions between the two nations unfold, the implications for trade dynamics and international relations remain critical.