Is the Korean National Assembly's 'Legislative Delay' to Blame? Trump's Motive Behind Renewed 25% Reciprocal Tariff Pressure

Trump Claims "Korean National Assembly Fails to Fulfill Agreement" on Social Media
Mentions Delay in Special Act on Investment in the U.S.
Seen as Pressure to Accelerate U.S. Investment Implementation
Blue House Convenes Emergency Response

President Trump has pressured South Korea by threatening to raise tariffs on Korean products from 15% back up to 25%, citing delays in the National Assembly's passage of the "Special Act on Investment in the United States." This move is interpreted as an attempt to expedite the execution of a $350 billion investment fund targeting the U.S. However, since the Korea-U.S. trade agreement only required the bill to be submitted, some view Trump's demand for immediate action as an unreasonable assertion aimed at accelerating investment in the U.S.

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On January 26 (local time), U.S. President Donald Trump posted on Truth Social, "The Korean National Assembly has not taken the necessary legal steps to implement the Korea-U.S. trade agreement," announcing that he would raise reciprocal tariffs on Korean products such as automobiles, lumber, and pharmaceuticals from 15% to 25%. President Trump also referenced the agreement reached in July of last year and during his visit to Korea, asking, "Why hasn't the Korean National Assembly approved the agreement?" However, he did not specify when the tariff increase would take effect.

In response, the Blue House convened a "U.S. Trade Affairs Meeting" on the morning of January 27, chaired by Policy Chief Kim Yongbeom and National Security Chief Wi Sunglak, to discuss the background of President Trump's tariff remarks and possible responses. The meeting was attended by Trade Negotiation Head Yeo Hankoo, First Vice Minister of Economy and Finance Lee Hyungil, and Second Vice Minister of Foreign Affairs Kim Jina. Also present were Economic Growth Chief Ha Junkyung, Third Deputy Director of the National Security Office Oh Hyunjoo, and AI Future Planning Chief Ha Jungwoo. Kang Hunsik, Chief Presidential Secretary, and Kim Jeonggwan, Minister of Trade, Industry and Energy, who are currently in Canada as part of a special delegation for strategic economic cooperation, joined the meeting via phone.

During the meeting, participants reviewed the progress of the special bill for strategic Korea-U.S. investment management, which is being pursued as a follow-up to the tariff negotiations. The Blue House explained, "Minister Kim Jeonggwan will visit the U.S. after completing his schedule in Canada to discuss the matter with Secretary of Commerce Howard Lutnick, and Trade Negotiation Head Yeo Hankoo will also soon visit the U.S. to meet with USTR Representative Jamieson Greer." The Blue House also stated, "A tariff increase would require administrative action, such as publication in the Federal Register," and emphasized that the government would communicate its intent to implement the agreement to the U.S. side and respond calmly.

The main issue is that President Trump cited "legislative delay" as the reason for restoring tariffs. Since the Korea-U.S. trade agreement specified that the condition for tariff reduction was the "submission (proposal) of the special act to the National Assembly," some interpret Trump's pressure for a tariff increase due to "delayed passage" as unreasonable. In trade negotiations, it is standard practice to clarify implementation requirements in the agreement's text to minimize disputes. Nevertheless, President Trump is effectively introducing "National Assembly passage" as a new standard, which is seen as a political maneuver to strengthen his negotiating position for a specific goal. Currently, five bills to establish the special act on investment in the U.S. have been proposed in the National Assembly since November of last year (four from the Democratic Party, one from the People Power Party).

Yonhap News Agency

The main purpose of Trump's public message is interpreted as an attempt to speed up the "processing" of the special act and accelerate the creation of the $350 billion U.S. investment fund, which has an annual cap of $20 billion. By threatening to raise tariffs again, the burden on industry and the market increases, which could in turn pressure the National Assembly to hasten legislative discussions. The focus is less on the passage of the bill itself and more on ensuring early implementation of the investment schedule and confirmation of investment destinations, using legislation as a pretext.

There is also a view that the U.S. intends to bundle various Korean systems and regulations as "non-tariff barriers" and use them as leverage. In particular, the U.S. appears to be highlighting digital and platform regulations-such as the Information and Communications Network Act, personal data protection and data transfer rules, and online platform fairness regulations, which have been repeatedly raised as issues-as obstacles to implementing the Korea-U.S. trade agreement, with the aim of using them as bargaining chips in future negotiations. Ultimately, by raising the issue of "legislative delay" in the Korean National Assembly, the U.S. is seeking to accelerate implementation of the trade agreement and regain the upper hand in negotiations.

The People Power Party, which has been calling for "parliamentary ratification," seized on Trump's remarks to shift responsibility onto the government and the ruling party. Park Soohyun, Chief Spokesperson of the Democratic Party, told The Asia Business Daily on January 27, "Currently, five bills to establish the special act on investment in the U.S. have been proposed in the National Assembly, and the process is proceeding normally," adding, "We should first monitor the government's response and listen to the U.S. explanation." As of now, all five bills (four from the Democratic Party, one from the People Power Party) proposed since November last year remain stalled at the National Assembly's Planning and Finance Committee stage.

The opposition has raised the issue of government and ruling party responsibility. Song Eonseok, floor leader of the People Power Party, said at a party strategy meeting on the morning of January 27, "This incident clearly demonstrates how unstable the Korea-U.S. tariff agreement, which the government has so often praised as a success, actually is," adding, "All responsibility lies with the government and ruling party, who concluded a trade agreement requiring ratification but have neglected the ratification process." The People Power Party plans to address the situation through an urgent parliamentary inquiry.

Industry observers believe that if tariffs do return to 25%, it will inevitably deal a direct blow to the price competitiveness and profitability of export items to the U.S., such as automobiles. However, since a mere social media post by President Trump does not immediately change tariffs, it is pointed out that the final implementation, timing, and scope of application must first be clarified. The Blue House has stated that, in the absence of an official notification and detailed explanation, it will confirm the relevant administrative procedures and the U.S. government's intentions, while seeking to minimize the impact through high-level consultations.