Trump to 'raise tariffs on South Korea'… "Other countries will also be unsettled"

Korea Economic Daily

Summary

US President Donald Trump said he would raise tariffs on South Korean products, including automobiles, back to pre-agreement levels.
The Financial Times (FT) said the move would undo the deal that lowered reciprocal tariffs from 25% to 15% in exchange for $350 billion in investment in the US, and that other countries would also be unsettled.
FT said uncertainty is being amplified by legal constraints on imposing reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA), the Supreme Court’s review, and the possible need for an executive order going forward.

As US President Donald Trump announced that he would raise tariffs on South Korean products, including automobiles, back to pre-agreement levels, reports have said the move is likely to reverberate across other countries as well.

The Financial Times (FT), a British daily, reported on the 26th (local time) that President Trump’s remarks would overturn the bilateral deal reached late last year, and that other countries that struck similar agreements would also be unsettled.

South Korea and the United States agreed in November last year to cut reciprocal tariffs on South Korea to 15% from 25% in exchange for Seoul’s pledge of $350 billion in investment in the US (about 505 trillion won). The agreement has already taken effect.

FT said Trump’s announcement immediately sowed confusion in the South Korean government, adding that uncertainty is heightened by the fact that the bilateral trade arrangement was made in the form of a fact sheet and a memorandum of understanding (MOU), rather than a formal treaty.

Foreign media noted that there could be constraints on Trump’s ability to actually impose reciprocal tariffs.

Trial courts in the first and second instances ruled it was unlawful to cite the International Emergency Economic Powers Act (IEEPA) as the legal basis for imposing reciprocal tariffs and the like. The Supreme Court is reviewing the matter following the Trump administration’s appeal.

FT explained that to implement the tariffs announced that day, Trump would need to exercise formal presidential authority, such as issuing an executive order. It added that many of his past tariff-related remarks ran into legal issues and could be struck down as unconstitutional by the Supreme Court.

Meanwhile, Trump wrote on Truth Social that “South Korea’s legislature did not codify the historic trade deal,” adding, “I am raising all reciprocal tariffs (country-specific tariffs)—on automobiles, timber, pharmaceuticals, and everything else—to 25% from 15%.”

Lee Song-ryeol, Hankyung.com reporter yisr0203@hankyung.com