US-South Korea Trade Tensions Escalate: Steep Tariffs on Steel and Autos Spark Economic Confrontation and Diplomatic Challenges

South Korea finds itself at the heart of a tense and consequential trade negotiation with the United States this October, as listeners will want to track not only headlines but the true impact of unfolding tariff policy. According to AOL News, the latest formal agreement sets a 15 percent tariff on South Korean imports into the U.S.—up significantly from previous rates, and notably, there is no reciprocal tariff on U.S. goods entering the Korean market.

Negotiations have remained deadlocked throughout the summer and fall, with the Trump administration pressing Seoul to commit $350 billion, largely in cash, as part of a broader $600 billion investment and purchase package. South Korea, led by President Lee Jae Myung, has insisted on terms more favorable to its own liquidity and currency stability, including a currency swap agreement rather than a cash outlay. According to Truthout, the investment and tariff package comes alongside additional pressure for South Korea to purchase $100 billion in U.S. liquefied natural gas and pour $150 billion into shipyard and manufacturing cooperation, all tied to hopes from President Trump to revitalize American shipbuilding under his MASGA initiative.

Listeners should know that sector-based tariffs are hitting hardest in steel and autos. Posco and Hyundai Steel, South Korea's leading steelmakers, are projected to pay $281 million in U.S. tariffs from March to December this year, which is termed by Maeil Business News Korea as roughly equivalent to their quarterly operating profits. In July, tariff rates on steel exports to the U.S. jumped to 50 percent, and the Korea Iron and Steel Association expects an ongoing decline in export volume.

On the political front, Trump's assertive stance is described by Korean labor unions and the minority Progressive Party as humiliating and "an act of plunder," reflecting broad dissatisfaction with what many see as one-sided negotiations. Public and business sector resistance, including strikes and major opposition rallies, have cast doubt on the longevity of the current arrangement. Still, according to Chosun Ilbo, both governments remain hopeful to advance talks at an upcoming summit in Gyeongju later this month, even as officials concede a breakthrough seems unlikely before the Asia-Pacific Economic Cooperation Leaders’ Meeting.

Pharmaceuticals are a bright spot for Korean exporters this week. The Korea JoongAng Daily reports that, despite Trump’s threats of broad pharmaceutical tariffs, generic drugs, which make up 90 percent of U.S. prescriptions, are set to be exempt from new duties—a relief for Korea’s $1.49 billion pharma exports to the U.S.

As listeners track South Korea’s evolving tariff landscape, expect continued volatility and headline developments, including possible visits by President Trump to Korean shipyards and further calls for domestic policy unity. For timely coverage and ongoing analysis, be sure to tune in next time and subscribe to South Korea Tariff News and Tracker.

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