US Imposes Massive 25% Tariffs on South Korean Exports Amid Trade Tensions and Economic Uncertainty in 2025

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US Imposes Massive 25% Tariffs on South Korean Exports Amid Trade Tensions and Economic Uncertainty in 2025

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Listeners, welcome back to South Korea Tariff News and Tracker. The US-South Korea trade relationship has seen significant upheaval in 2025, with major headlines dominating the business and political landscape. This year, President Donald Trump introduced a sweeping 25% tariff on many South Korean exports to the United States starting April 9. According to Source of Asia, this is the highest rate Washington has ever applied to a US free trade agreement partner, even outpacing the new tariffs on Japan and the European Union. The move has sent shockwaves through South Korea’s key export sectors, including automotive, semiconductors, steel, consumer electronics, and petrochemicals. Notably, South Korea’s automotive industry, which exported $34.7 billion in vehicles to the US last year, now faces not only the baseline 25% tariffs but the risk of targeted duties as high as 200% on certain cars, particularly impacting giants like Hyundai and Kia.

Listeners should also note that these tariffs were initially paused for a 90-day period after Trump’s executive order in early April. ABC News reports that this pause is set to expire on July 9, putting South Korean goods back under threat of the 25% rate unless a new deal is struck at the last minute. Government officials in Seoul, including President Lee and Trade Minister Yeo Han-koo, have been urgently trying to negotiate with the US, but as of the latest updates, the outcome remains uncertain. President Lee has publicly called for patience, warning that a rushed agreement could harm South Korea’s long-term interests. Meanwhile, Washington has been discussing not only tariffs but also higher defense cost-sharing for the continued presence of US troops in South Korea.

Trump’s tariff escalation has been defended in speeches, with the president claiming at an April press event that the US was “taking in almost $2 billion a day in tariffs.” However, PolitiFact has noted Trump provided no evidence for these figures, and economists caution that such high estimates assume trade volumes wouldn’t decline, which is unlikely as tariffs increase costs and reduce imports.

On the technical front, the White House confirmed that, as of April 5, a 10% tariff baseline would apply to nearly all countries, but South Korea and other major trading partners with significant US deficits would face higher reciprocal rates. Trump’s justification rests on the International Emergency Economic Powers Act, aiming to curb persistent trade deficits and counter what his administration calls unfair trade practices and currency policies abroad.

The fallout from these policy changes has been immediate for South Korea’s economy. The Korea Development Institute recently trimmed its full-year 2025 economic growth forecast to below 1%, citing both the shock from US tariffs and ongoing demographic challenges. Political turbulence has accompanied economic pressure, with the impeachment and ouster of President Yoon Suk Yeol in April setting the stage for a new administration under President Lee, who faces the dual task of defending export interests abroad while stabilizing growth at home.

Thanks for tuning in to South Korea Tariff News and Tracker. Don’t forget to subscribe for ongoing updates as this story develops. This has been a quiet please production, for more check out quiet please dot ai.

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