U.S.-South Korea Trade Dispute Escalates with Proposed Tariff Hikes
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On January 26, 2026, former U.S.President Donald Trump announced via social media his intention to increase tariffs on South korean goods, citing a lack of Congressional approval for a trade agreement. The proposed tariffs would rise from 15% to 25% on items including automobiles, lumber, and pharmaceuticals. This action builds upon a framework agreement initially reached with South Korean President Lee Jae-myung on July 30, 2025.
background of the U.S.-South Korea Trade Agreement
The dispute centers around a trade agreement framework established between the U.S. and South Korea in July 2025. Trump alleges that the U.S. Congress has failed to ratify the agreement,prompting him to implement what he terms “reciprocal tariffs.” The original framework aimed to address trade imbalances and ensure fairer market access for U.S. goods in South Korea.
According to the Office of the United States Trade Representative, the U.S. has consistently sought to negotiate trade agreements that benefit American workers and businesses. However, as of January 27, 2026, there is no official record of the agreement being submitted to Congress for ratification.
Proposed Tariff Increases and Affected Sectors
The proposed tariff increases target several key South Korean export sectors. Specifically, automobiles, timber, and pharmaceuticals are slated to face a 10-percentage-point increase, moving from a 15% tariff to 25%. This action could significantly impact South Korean manufacturers and perhaps raise prices for American consumers.
The Korea.net reports that the automotive industry is a major contributor to the South Korean economy, accounting for approximately 7% of the nation’s GDP in 2024. A 25% tariff could substantially reduce the competitiveness of South Korean vehicles in the U.S. market.
South Korean Response and Potential Implications
As of January 27, 2026, the South Korean government has not issued an official response to Trump’s announcement. However, analysts anticipate a strong rebuke and potential retaliatory measures.
The Ministry of Foreign Affairs of the Republic of Korea has previously emphasized the importance of maintaining stable trade relations with the U.S. Any escalation of this trade dispute could disrupt global supply chains and negatively impact both economies. Further developments are expected in the coming days as South Korea formulates its official response.