U.S. President Donald Trump announced plans to raise tariffs on South Korean automobiles, pharmaceuticals, lumber and other goods from 15 percent to 25 percent, citing delays in Seoul's implementation of a bilateral trade deal. Republicans have linked the move to South Korea's probe into U.S.-listed e-commerce firm Coupang, though Trump later signaled room for negotiation. Seoul denies any connection and is dispatching officials for talks.
On January 27, 2026 (Korea local time; U.S. time January 26), U.S. President Donald Trump posted on Truth Social that he is increasing 'reciprocal tariffs' on South Korean automobiles, lumber, pharmaceuticals, and other goods from 15 percent to 25 percent, stating, 'Because the Korean Legislature hasn't enacted our Historic Trade Agreement.' The deal, agreed on July 30, 2025 and reaffirmed during Trump's October 29, 2025 visit to South Korea, included Seoul's commitment to $350 billion in U.S. investments in exchange for U.S. tariff reductions from 25 percent, which Washington implemented retroactively in early December after Korea's ruling Democratic Party submitted an implementing bill to the National Assembly on November 26, 2025. The bill has yet to pass.
A White House official noted that 'South Korea has made no progress' on its obligations. South Korea's government stated it has not received official notification, convening an emergency interagency meeting chaired by presidential chief of staff for policy Kim Yong-beom. Industry Minister Kim Jung-kwan, currently in Canada, will travel to Washington for talks with Commerce Secretary Howard Lutnick, while Finance Minister Koo Yun-cheol pledged to 'actively explain' legislative progress.
U.S. Republicans have tied the tariff threat to South Korea's regulatory scrutiny of Coupang, a U.S.-listed e-commerce giant headquartered in Seattle but primarily operating in Korea. The firm faces a probe over a November 2025 data breach affecting about 33.7 million customers, though Coupang claims only 3,000 accounts were accessed. The House Judiciary Committee's Republican account posted on X: 'This is what happens when you unfairly target American companies like Coupang.' Vice President JD Vance had previously warned Prime Minister Kim Min-seok against 'penalizing' Coupang and other U.S. tech firms. South Korea's Foreign Minister Cho Hyun countered that the tariff threat 'has no direct connection' to the Coupang case or proposed online platform regulations.
Trump later indicated flexibility, saying his administration would 'work something out' with South Korea. Experts view the announcement as a negotiating tactic. Tom Ramage of the Korea Economic Institute of America told Yonhap: 'It could be to bring Korea to the table for additional concessions, but threats should be taken seriously.'
The auto sector accounts for 27 percent of South Korea's exports to the U.S., and higher tariffs could disadvantage Korean firms against competitors from Japan and the EU. Korean stocks dipped initially after the announcement but rebounded, viewing the threat as short-term. Separately, the U.S. Supreme Court is reviewing the legality of Trump's tariffs under the 1977 International Emergency Economic Powers Act, with a ruling expected soon. The episode highlights ongoing frictions in the allies' economic relationship.
