US Imposes 25 Percent Tariff on South Korean Exports Amid Tense Trade Negotiations and Economic Uncertainty
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US Imposes 25 Percent Tariff on South Korean Exports Amid Tense Trade Negotiations and Economic Uncertainty
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As of late May 2025, the trade environment between South Korea and the U.S. is at a critical juncture. Earlier this spring, the Trump administration imposed a 25 percent reciprocal tariff on South Korean exports—a move that sent shockwaves through the industries that have long benefited from the two countries’ free trade agreement. This new rate replaces the briefly considered 26 percent level, after late-night negotiations by South Korean officials led to a revision, confirming 25 percent as the final figure, as reported by Yonhap News Agency.
This 25 percent tariff, the highest the U.S. has ever applied to an FTA partner, now stands above those for Japan and the European Union, which currently face tariffs of 24 percent and 20 percent, respectively. The sectors feeling the brunt of these actions include automotive, semiconductors, steel, aluminum, and consumer electronics. The automotive industry in particular is reeling, as $34.7 billion worth of South Korean vehicles were exported to the United States last year alone, nearly half of the nation’s total automotive exports. Hyundai and Kia, major players in the U.S. market, now face the prospect of additional vehicle-specific tariffs as high as 200 percent, according to Source of Asia.
South Korea’s government is pushing hard for tariff exemptions or reductions, leveraging its longstanding free trade agreement with the U.S. and a significant track record of investment and trade. Trade Minister Ahn Duk-geun recently expressed in Jeju that South Korea “maintains a bilateral free agreement with the United States unlike several other nations,” and is prioritizing negotiations to seek relief from both reciprocal and product-specific tariffs.
Trade officials from both sides have been in intensive talks in Washington this week. The outcome is especially urgent, as President Trump’s 90-day suspension of an even steeper 34 percent tariff expires in July. According to the Los Angeles Times, these negotiations have also expanded to encompass issues such as currency policy and defense cost-sharing, reflecting broader strategic friction between the allies.
All this is unfolding against a backdrop of economic uncertainty, with the IMF recently downgrading South Korea’s 2025 growth forecast to just 1 percent, citing the steepest effective tariff rates in a century and a highly volatile trade environment, as reported by UPI.
Listeners, we’ll be watching closely as these negotiations continue, with high stakes for South Korea’s economy, industries, and global standing. Thank you for tuning in to South Korea Tariff News and Tracker. Don’t forget to subscribe for the latest updates. This has been a quiet please production, for more check out quiet please dot ai.
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