President Donald Trump announced raising import tariffs on goods from South Korea—including automobiles, processed lumber, and medicines—from 15% back up to 25%. He cited delays by South Korea's parliament in approving a trade agreement reached last year. Analysts view this as "maximum pressure" aimed at forcing South Korea to concede on non-tariff barriers. Meanwhile, Hyundai and Kia shares experienced heavy volatility immediately after the news.
US President Donald Trump stated he has ordered an increase in import tariffs on cars and other goods from South Korea, criticizing the South Korean legislature—an important ally and trading partner—for delaying the enforcement of a trade deal agreed upon in mid-2025.
On 30 July 2025, President Trump and South Korean President Lee Jae-myung reached a principle agreement for South Korea to invest up to $350 billion in the US, in exchange for the US reducing import tariffs on South Korean goods. However, Trump recently said on social media, "Since South Korea's parliament has not enforced this deal, I hereby announce an immediate increase of import tariffs on South Korean automobiles, processed lumber, medicines, and other retaliatory goods from 15% back to 25%."
Sources close to the talks indicated Trump’s impatience may stem from South Korean authorities applying regulations to investigate Coupang, a major e-commerce company listed on the US stock market, which is seen as unfair and discriminatory treatment.
Choi Seok-young, a former South Korean trade negotiator, views this as a "political game" by the US using maximum pressure to force South Korea to reduce non-tariff trade barriers affecting US technology firms.
Following the announcement, South Korea’s KOSPI index dropped 1.19% before slightly recovering, while the won depreciated by 0.5% against the dollar, reaching levels near those seen during the 2007–2009 global financial crisis.
In the industrial sector, Hyundai Motor shares fell 4.8% and Kia shares dropped 6% initially, as the US is one of their top export markets. In 2025, car exports to the US were valued at $30.2 billion.
South Korean authorities said they have not received an official notice from the US. Currently, the Minister of Industry, who is visiting Canada, plans to urgently meet with US Commerce Secretary Howard Lutnick to discuss possible solutions.
Meanwhile, South Korea’s Ministry of Finance explained that the delay in the $350 billion investment plan is due to awaiting clarity from the US Supreme Court’s decision on Trump’s tariffs, along with concerns about capital outflows amid the won’s depreciation.
Trump’s recent move serves as a reminder to global investors that "tax stability" for 2026 remains uncertain, and that US trade policy under his second term continues to be volatile and unpredictable.