Trump’s ‘Korean TACO’ After Greenland: Asian Markets Rebound

KOSPI Closes Above 5,000 for the First Time
Nikkei Also Ends Higher

Yonhap News Agency

On January 27, despite U.S. President Donald Trump’s pressure on South Korea regarding reciprocal tariffs on automobiles, major Asian stock markets, including the KOSPI, closed higher. The market appeared relieved by the prospect that President Trump would “TACO” (Trump Always Chickens Out), as he remained silent after his initial tariff threats.

On this day, the KOSPI finished at 5,084.85, up 2.73% from the previous session. This marks the first time in history that the KOSPI index has closed above the 5,000-point threshold. Japan’s Nikkei index also rose 0.85% from the previous day, reaching 53,333.54. Major Asian stock markets initially opened lower due to the impact of President Trump’s reciprocal tariff comments, but rebounded in the afternoon as market anxiety eased.

Earlier that morning, President Trump posted on his social media platform, Truth Social, stating, “The Korean National Assembly is not implementing the trade agreement with the United States,” and added, “Because the Korean National Assembly has not legislated the trade agreement, tariffs on South Korean automobiles, lumber, pharmaceuticals, and all other reciprocal tariffs will be raised from 15% to 25%.”

Both domestic and international analysts interpreted this as President Trump expressing dissatisfaction over delays in South Korean investment in the United States, following the failure to pass the “Special Act on Strategic Investment Management for the United States” (Special Act on U.S. Investment), which is currently pending in the National Assembly. In response, the government and the ruling party announced an emergency response, stating that the special act on U.S. investment would be processed by next month.

Since then, President Trump has made no additional comments regarding South Korean tariffs. CNBC reported, “As President Trump is expected to quickly step back from his hardline stance in response to the swift actions of the South Korean government, major Asian indices, including the KOSPI, rebounded.”