Seoul pledges commitment to $350B trade deal amid Trump’s tariff threats
Seoul, South Korea – Web Desk: South Korea swiftly reassured the United States of its commitment to a landmark trade and investment agreement after President Donald Trump threatened to sharply raise tariffs on South Korean goods, including autos, lumber, and pharmaceuticals. The proposed tariffs would jump to 25% from the current 15%, citing delays by Seoul in implementing the 2025 trade deal.
President Trump criticized the South Korean parliament for failing to enact the agreement reached in principle last July, which linked large-scale South Korean investments in the US to tariff reductions. Under the deal, Seoul committed to investing $350 billion in US business projects, with $200 billion to be paid in phased installments capped at $20 billion per year to reduce pressure on the Korean won.
The agreement also strengthened broader trade and security cooperation between the two allies, reaffirmed during Trump’s October visit to South Korea. Trump argued that the legislative delays justified higher tariffs on key imports, targeting sectors from automobiles to pharmaceuticals.
South Korean officials expressed surprise at the US president’s comments, which added pressure on Seoul as it manages its economic stability and strategic alliance with Washington. The country faces challenges including currency volatility and financial concerns amid global uncertainty.
In response, South Korea’s presidential office and the ruling party pledged immediate action to move the agreement forward. Officials emphasized that implementing the trade deal remains a priority for bilateral relations and is critical for long-term economic cooperation with the US. Finance Minister Koo Yun-cheol noted that while the government intends to begin implementing the investment package as soon as possible, pending US Supreme Court decisions regarding tariffs may affect the timeline. He further cautioned that the investment plan is unlikely to start in the first half of 2026 due to the continued weakness of the won.
Experts highlight that the trade deal could bring substantial benefits to both countries, enhancing South Korean exports in labor-intensive sectors while offering American products price advantages in the Korean market. Analysts also see the agreement as a strategic move for Washington and Seoul to reinforce economic and security ties in the Asia-Pacific region.
