Trump's tariff hike aimed at expediting S Korea's investment in US

Seoul, Jan 27 : US President Donald Trump's surprise announcement to raise tariffs on South Korea appears to be aimed at pressuring the country to swiftly carry out its investment pledge to the United States amid domestic uncertainties, including the U.S. Supreme Court's planned ruling on the legality of the tariffs, experts here said on Tuesday.

Earlier in the day, Trump said in a social media post that he is raising "reciprocal" tariffs and auto duties on South Korea to 25 per cent from 15 per cent, arguing Seoul's National Assembly has not yet completed the domestic process to implement the countries' bilateral trade deal, finalised in October, reports Yonhap news agency.

Trump was apparently referring to a special bill submitted by Korea's ruling Democratic Party in November for supporting the country's US$350 billion investment pledge to the U.S., which was part of the tariff deal between the two countries.

The bill has yet to gain the Assembly's approval. "Trump's move seems to be fundamentally aimed at ensuring the passage of the special investment bill, which is being delayed at the National Assembly, rather than actually raising the tariffs," Kwon Nam-hoon, president of the Korea Institute for Industrial Economics and Trade, said.

"As there is a possibility of the U.S. Supreme Court striking down reciprocal tariffs, Trump may have acted out of a sense of urgency to secure a firm commitment (from Korea) before things get more delayed," he added, noting the U.S. might have felt Korea was "testing the waters."

Shin Won-kyu, a chief analyst at the Korea Economic Research Institute, said Trump's move could be stemming from heightened anxiety with an array of issues bursting out, including criticism over his immigration policy and ambitions over Greenland, as well as escalating tensions with the European Union and Canada.

Trade experts also said they cannot rule out the possibility that Korea's recent push for digital regulations, including an ongoing probe into U.S.-listed e-commerce giant Coupang Inc.'s massive data leakage incident, affected Trump's decision.

U.S. lawmakers and investors have called the investigation into Coupang "discriminatory," while the State Department expressed "significant concerns" last month over Seoul's regulatory moves that could affect online platform businesses.

The Coupang issue was also discussed during Korean Prime Minister Kim Min-seok's meeting with U.S. Vice President JD Vance last week, where the two agreed to manage the issue to ensure it will not cause misunderstandings between the two governments, according to Seoul officials.

"Unilaterally overturning agreed terms between the two countries via a social media post is not only undiplomatic, but also extremely difficult to comprehend from a diplomatic standpoint," Yoon Heo, economics professor at Sogang University, said.

Meanwhile, the Seoul government said it will closely communicate with Washington over the ongoing legislative progress on the U.S. investment bill, while devising a response strategy.

Korea has not received an official notice or explanation from the U.S. over Trump's tariff hike announcement, Cheong Wa Dae said earlier, adding it will soon hold an emergency interagency meeting, headed by presidential chief of staff for policy Kim Yong-beom, to discuss the government's response.

Industry Minister Kim Jung-kwan, who has been on a visit to Canada, was set to head for Washington, where he will discuss the matter with his U.S. counterparts, his office said, adding that a meeting with U.S. Commerce Secretary Howard Lutnick was being arranged.