President Trump recently announced a 25% tariff on all imports from South Korea, effective August 1. According to Nikkei reports, political turmoil led by President Yoon Suk-yeol's impeachment disrupted U.S.-South Korea tariff negotiations for six months. New President Lee Jae-myung faced this challenge but opted to extend the hesitation period due to a lack of preparation, thus avoiding the worst outcome.
Trump has not only pressured South Korea for significant increases in defense spending and sharing costs for U.S. troops stationed in South Korea but has also indicated an intention to link security agreements with tariff negotiations, compelling South Korea to make concessions. Nikkei analysts suggest that the U.S. hopes to enhance its revenue while intimidating other nations through this strategy. U.S. troops in South Korea number 28,500, and Trump has left room for adjusting the tariffs based on South Korea's response.
President Lee's administration is under scrutiny as public opinion surveys indicate an uptick in support due to economic recovery strategies, making successful trade negotiations with the U.S. a critical early test of his presidency.