U.S. President Trump announced this morning that he will raise South Korea’s import tariffs from 15% back to 25%, accusing Seoul of failing to fulfill a $350 billion investment commitment. South Korea’s Minister of Trade, Kim Jeong-gwan, urgently flew to the United States to contain the crisis.
(Background: The U.S. finalized a “tariff reduction to 15%” for Taiwan, and reports suggest TSMC is increasing investments by trillions to build five more factories in the U.S.)
(Additional context: Denmark’s pension fund announced it will liquidate its U.S. bonds! CIO: Trump is worsening U.S. credit, making fiscal sustainability impossible.)

Table of Contents

• The $350 billion check from six months ago
• The double squeeze of the Korean won’s plunge and export dependence
• No “completed” deals in the Trump 2.0 era

This morning (27th), President Trump dropped a bomb on his Truth Social platform, angrily criticizing the South Korean Congress as a bunch of “sluggish bureaucrats,” and announcing that tariffs on imported cars, parts, lumber, and pharmaceuticals from South Korea would immediately be raised from 15% to 25%, ending the brief U.S.-Korea honeymoon period.

In his post, Trump bluntly wrote:

We gave South Korea huge concessions, putting them on equal footing with Japan.

But what happened? They took the discounts but held back on the promised investments. Congress didn’t approve? That’s your problem, not mine. Tariffs go back to 25%, effective immediately!

After the announcement, South Korea’s Minister of Trade, Kim Jeong-gwan, who was originally on a visit to Canada, had to urgently rebook his flight to Washington, trying to meet with Commerce Secretary Lighthizer outside his office, acting like a firefighter rushing to contain the blaze.

The $350 billion check from six months ago

To understand this storm, we need to rewind six months. In July 2025, South Korean President Lee Jae-myung signed an expensive agreement to keep Hyundai and Kia cars alive in the U.S. market.

The deal structure at the time involved: the U.S. lowering tariffs from 25% to 15%, giving Korean automakers the same treatment as Japanese competitors; in return, South Korea committed to investing $350 billion in the U.S.

This money wasn’t just for building factories; according to Global Trade Alert data, up to $200 billion of it was cash investments. Even for South Korea’s chaebols, this was a heavy burden.

Now it seems Lee Jae-myung’s government overestimated its control over Congress. The bill has been sitting idle in the National Assembly in Yeouido, Seoul, for three months. For Trump, who demands “immediate satisfaction,” this is tantamount to default.

The double squeeze of the Korean won’s plunge and export dependence

Trump’s timing was precise, targeting South Korea’s throat. The won has now fallen to its lowest point since the 2008 financial crisis. At this critical juncture, fulfilling the commitment to move hundreds of billions of dollars out of the country would be like stabbing a wounded patient already bleeding heavily.

According to Seoul Economic Daily, the Korean Ministry of Finance hinted at delaying investment plans until late 2026 because they dare not allow capital outflows at this moment. But Trump isn’t buying that. To him, this isn’t economic hardship; it’s a lack of sincerity.

The Korean auto industry contributes 27% of U.S. exports. If tariffs return to 25%, the price competitiveness of Korean cars compared to Japanese cars could evaporate instantly.

No “completed” deals in the Trump 2.0 era

This incident once again illustrates that in the Trump 2.0 era, there are no such things as “completed” deals. All agreements are “floating rate.” The tariff exemptions you get today could be revoked tomorrow due to congressional delays or currency devaluation.

Now, all eyes are on the meeting between Kim Jeong-gwan and Lighthizer to see if there will be a turning point. However, Trump has already proven that he is willing to tear up alliances at any time for “America First.” For countries that think signing a deal guarantees peace of mind, Seoul’s current panic is the most unvarnished warning.