Trump says tariffs on South Korean autos, pharma, lumber to rise to 25% over trade deal enaction delay

• Tariffs on South Korean autos, pharmaceuticals, and lumber will increase from 15% to 25% due to legislative approval delays
• Trump cited a trade deal reached with South Korean President Lee on July 30, 2025, which has not yet been approved by South Korea's legislature
• Hyundai, a South Korean-based automaker, is the largest importer of new vehicles from South Korea into the United States and will be significantly affected

Summary: Trump Escalates South Korea Tariffs to 25%

President Donald Trump announced Monday he is increasing tariffs on South Korean automobiles, pharmaceuticals, and lumber from 15% to 25%, citing delays in South Korea's legislative approval of a bilateral trade agreement.

Key Details

Tariff Changes:

• Previous rate: 15%
• New rate: 25%
• Affected sectors: Automotive, pharmaceuticals, lumber

Timeline:

• July 30, 2025: Original trade deal reached between Trump and South Korean President Lee
• October 29, 2025: Terms reaffirmed during Trump's visit to Korea
• January 2026: Tariff increase announced due to legislative inaction

Rationale

Trump stated via Truth Social that "South Korea's Legislature is not living up to its Deal with the United States," expressing frustration over the delayed parliamentary approval despite agreements reached at the presidential level.

Market Implications

Primary Impact:

Hyundai, identified as the largest importer of new vehicles from South Korea to the U.S., faces the most immediate pressure from these tariff increases. The 10-percentage-point jump represents a significant cost increase that could affect pricing strategies and profit margins.

Broader Concerns:

• Increased costs for South Korean automotive imports may be passed to U.S. consumers
• Pharmaceutical and lumber industries face similar margin compression
• Trade uncertainty may discourage South Korean investment in U.S. operations
• Potential for retaliatory measures from Seoul

This development highlights ongoing volatility in U.S. trade policy and adds pressure on foreign legislative bodies to expedite trade agreement ratifications to avoid punitive tariffs.