Trump’s 25% Tariff on South Korea: Fair or Unfair?
In April 2025, the United States announced a 25% tariff on Korean imports, once again escalating trade pressure on South Korea. The move was justified under the banner of “correcting trade imbalances,” a core message of former President Donald Trump during his time in office.
The Logic Behind the Tariff
According to official data from the U.S. Census Bureau, the 2024 trade figures between the U.S. and South Korea were:
- Imports from Korea: $131.5 billion
- Exports to Korea: $65.5 billion
- Trade Deficit: $66 billion
This trade deficit has been used as the main justification for the potential 25% tariff on Korean goods. However, calculating tariffs based solely on the trade gap—simply “deficit × tariff rate”—is a mechanistic and overly simplistic approach.
In today’s interconnected global economy, trade balances are influenced by a wide range of factors. A unilateral tariff based on raw numbers fails to account for these complexities and overlooks the broader economic and strategic context.
Do These Tariffs Make Sense?
Here’s the paradox:
The U.S. and South Korea are bound by a free trade agreement—the KORUS FTA—which virtually eliminated tariffs on most goods.
Implemented in 2012, the agreement was built on the principle of mutual benefit and open access. Reimposing tariffs now not only contradicts the spirit of the agreement but could also undermine global supply chains and damage trust in trade partnerships.
A Brief History of the KORUS FTA
- 2007: Agreement signed
- Gradual tariff elimination on most goods
- Market opening in services (finance, law, telecom)
- Stronger protection for intellectual property
- ISDS clause for investor protection
- 2012: FTA came into effect
- 2018: Renegotiated under Trump administration
- Aimed at reducing the U.S. trade deficit
- U.S. car safety standards relaxed for exports to Korea
- Export quotas placed on Korean steel (tariffs avoided)
- 25% tariff on Korean pickup trucks extended to 2041
- 2019: Revised agreement went into force
These developments show how both countries have gradually expanded market access through multiple rounds of negotiation.
Why This Matters Now
If tariffs are used as a tool to pressure trade partners or bypass FTA principles, both countries risk economic losses—not just for governments, but for companies and consumers alike.
The KORUS FTA represents more than trade; it is a strategic alliance in economic form. As global trade dynamics continue to shift, it’s more important than ever to watch how this agreement evolves—and how any changes might shape the future of the U.S.-Korea economic relationship.
Source
US Census Bureau