Trump Proposes 25% Tariff on Korean Imports

President Donald Trump announced plans to hike tariffs on South Korean imports to 25%, up from the current 15%. He cited the South Korean legislature’s failure to ratify a trade deal finalized in late 2025 as the primary reason for the increase. The move targets key sectors including automobiles, pharmaceuticals, and lumber.

Resilience in Seoul

Despite the news, South Korean equities remained resilient. The benchmark Kospi index rebounded from early losses to hit new record highs, largely supported by intense dip buying. Key highlights from the market reaction include:

• Tech Dominance: Chipmakers like Samsung led the recovery, driven by sustained global demand for AI infrastructure.
• Auto Volatility: While major automakers initially saw shares drop, they recovered as investors bet on successful negotiations.
• Government Response: Seoul convened an emergency meeting and dispatched Trade Minister Kim Jung kwan to Washington for urgent talks.

Investors appear to be looking past the protectionist rhetoric, focusing instead on strong domestic earnings. However, the 10% rate hike remains a significant hurdle for the economy if finalized.