U.S. President Donald Trump has criticized South Korea for imposing more unfair tariffs on American products than China. The President also criticized the country for issuing subsidies to foreign chipmakers like Samsung Electronics Co. The country’s currency weakened against the dollar to about 1,460 won, though Samsung shares remained largely unchanged. Trump also argued that Samsung was a major recipient of subsidies under the Chip Act for building a plant in Texas. The President urged the Speaker to get rid of the Chip Act and redirect the funds to reduce the country’s debt . Trump puts a spotlight on South Korean ‘higher-than-China’ tariffs Trump accuses South Korea of imposing higher tariffs on American products than China. South Korea says its tariff on manufactured US goods is zero. https://t.co/qq3iDkSFuF — Sam Kim (@samkimreports) March 5, 2025 Donald Trump has pointed to South Korea for imposing higher tariffs against American products than China. He argued that the country imposed tariffs four times higher than those of China. “China’s average tariff on our products is twice what we charge them, and South Korea’s average tariff is four times higher. Think of that, four times higher, and we give so much help militarily and in so many other ways to South Korea, but that’s what happens. This is happening by friend or foe.” – U.S. President Donald Trump . Trump’s comments hinted concerns for policymakers and businesses in South Korea as he might eventually turn his attention to trade and security relations with Seoul. The country’s currency briefly plummeted against the dollar to around 1,460 won after Trump mentioned South Korea’s tariffs, before paring losses. The South Korean government has dismissed Trump’s claims that its tariff rate is four times higher. The government has said that the effective rate on imports from the U.S. under the Korea-U.S. FTA was 0.79% as of 2024. The 47th President of the U.S. also noted that Mexico and other states have trade surpluses with the United States that impose duties on American products. He maintained the high level of unfairness he felt toward South Korea, which supplies the U.S. with everything from automobiles to semiconductors. The country highlighted last month that its tariffs on manufactured goods from the U.S. are effectively zero under a free trade agreement that took effect in 2012. The state also applies hefty tariffs on some agricultural goods, such as rice. Bloomberg Economics estimated that imposing U.S. tariffs could reduce South Korea’s gross domestic product by 0.8% this year. The firm also found that the impact of U.S. tariffs on South Korea’s GDP will be concentrated in the second half. South Korean officials were in Washington last week, where they urged the country’s longtime ally to exempt Seoul from Trump’s planned tariffs. The nation argued that it relies heavily on trade for economic growth, with its largest firms generating the bulk of their revenues overseas. The officials also highlighted that the latest tariffs on China, Mexico and Canada will impact South Korea indirectly by dwindling demand for items that eventually end up in the U.S. South Korea expects more issues with Trump’s administration The country also acknowledged that it could face more issues with Trump’s administration, such as security relations. South Korea highlighted that it depends on security guarantees from Washington to deter North Korean aggression. The U.S. president referred to its ally as a “money machine” last year as he demanded that South Korea shoulder more of the upkeep for American troops stationed on the Korean Peninsula. Trump also critiqued the Chips and Science Act introduced under the Biden administration and called it a “horrible, horrible thing.” He refrained from mentioning Samsung, the country’s builder of memory chips that is a major recipient of subsidies under the act for a plant it’s constructing in Texas. His comments rekindled concerns that the project may be halted for foreign manufacturers setting up operations in the U.S. The U.S. president believes that “they will come because they won’t have to pay tariffs if they build in America.” He also urged the Speaker not to get rid of the Chip Act but instead use it to reduce debt or “any other reason you want to.” Bloomberg Economics believes that the U.S. tariffs and the uncertainty that comes with them could limit exports and output from South Korea. The news outlet said the threat of new U.S. tariffs could curb exports and output due to delayed decisions by South Korea’s exporters and reduced U.S. demand or imports. Trump also made other comments about South Korea and noted that it was among nations that wanted to partner in a natural gas pipeline in Alaska. The United States has advertised the project’s promise to Asian policymakers, such as Japan’s prime minister and South Korea’s trade minister. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
