President of the United States Donald Trump announced plans to increase tariffs on goods imported from South Korea to 25%. This decision was made following his accusations against Seoul of failing to comply with the terms of the trade agreement signed last year, reports the BBC.
In his social media message, Trump announced the increase in tariffs on a number of goods, including cars, timber, pharmaceuticals, and other products subject to reciprocal tariffs, from 15%.
He also emphasized that South Korean lawmakers are delaying the approval process of the agreement, while the United States has already begun to reduce its tariffs in accordance with the reached contract.
In response, South Korea stated that it had not received official notification of the impending tariff increase and demands urgent negotiations with the American side to resolve the situation.
The Minister of Industry of South Korea, Kim Jong Kwan, who is currently in Canada, plans to visit Washington as soon as possible to discuss the situation with U.S. Secretary of Commerce Howard Lutnick.
As of Tuesday morning, shares of several South Korean exporters fell: Hyundai's stock price decreased by about 2.5%, and shares of companies in the pharmaceutical and logging sectors also declined.
The agreement between Seoul and Washington, reached in October of last year, provided for South Korean investments of $350 billion (£256 billion) in the U.S., part of which would be directed towards the development of the shipbuilding industry.
The following month witnessed both countries agreeing to reduce tariffs on certain goods after the South Korean parliament began the approval process of the agreement.
The document was presented for consideration to the National Assembly of South Korea on November 26 and is currently awaiting approval, which is expected to take place in February.
The tariffs will be paid by American companies importing products from South Korea, which implies a 25% tax on imported goods.
Throughout his second term, President Trump has actively used tariffs as a tool of foreign economic policy.
Last Saturday, he also stated that he might impose 100% tariffs on goods from Canada if the country concludes a trade agreement with China.
On Monday, Chinese representatives noted that their agreement with Canada on "strategic partnership" is not directed against other states.
Canadian Prime Minister Mark Carney emphasized that his country is not seeking to conclude a free trade deal with China and has "never" considered such an option.
He also noted that Canadian authorities clearly communicated their position to their American counterparts.
Earlier, Trump announced his intention to impose import tariffs on eight countries, including the United Kingdom, which oppose U.S. plans to acquire Greenland, an autonomous territory of Denmark and a NATO member.
However, he later backed away from these threats, citing progress in negotiations regarding the "future agreement" on the island, which nevertheless strained relations with Denmark and other NATO allies.
