Seoul says US tariff agreement already in force without legislative passage

U.S. President Donald Trump visits a Ford production center in Dearborn, Mich., Jan. 13. Reuters-Yonhap

U.S. President Donald Trump’s announcement to raise tariffs on Korean goods due to the Korean National Assembly's alleged delayed approval of a relevant bill has sparked debate over whether Seoul has failed to honor a bilateral trade agreement.

Government officials and lawmakers in Seoul, however, say that according to relevant documents, such as a memorandum of understanding (MOU) reached between the two governments last year over the tariff level and investments, there is no direct link between Korea’s legislative process and tariff policy.

Trump said Monday (local time) that tariffs on a wide range of Korean goods, including cars, timber and pharmaceuticals, would be increased from 15 percent to 25 percent, arguing that the National Assembly had not approved what he described as a “historic” agreement reached between the two countries.

At the center of the dispute is the MOU signed last November, according to which the U.S. would cut tariffs on Korean imports from 25 percent to 15 percent. Under the MOU, tariff reductions were designed to take effect retroactively from the first day of the month in which the implementing bill is submitted to the Assembly.

After the ruling Democratic Party of Korea (DPK) submitted the relevant bill on Nov. 26, 2025, the U.S. applied the agreed tariff cuts retroactively to Nov. 1. Seoul says the retroactive tariff cuts showed the agreement was already being implemented, even though the bill has yet to clear the Assembly.

It also maintains that submitting the bill met the MOU’s requirements, which do not link tariff levels to parliamentary timelines.

Export-bound vehicles are parked at Pyeongtaek Port in Gyeonggi Province, Monday. Yonhap

The bill has remained pending at the Assembly's Finance, Economy, Planning and Budget Committee. The ruling camp says the bill has been undergoing due process on a timeline, meaning the review and passage have not been “delayed,” although there has been disagreement between the ruling and opposition parties.

DPK Rep. Jung Tae-ho, a member of the committee, said the government had originally asked lawmakers to have the bill placed on the committee agenda and passed by February.

“December and January effectively function as a period of careful review,” Jung told reporters. “The bill will enter the formal deliberation process in February in a normal and orderly manner.”

Jung added that discussions are underway between ruling and opposition lawmakers to convene committee meetings in the first and second weeks of February.

The main opposition People Power Party (PPP) has claimed the trade agreement requires parliamentary ratification, saying the Constitution requires it for a treaty, agreement or MOU that is likely to place significant financial burdens on the people.

But the ruling party and the government have said the MOU is not subject to ratification.

Rep. Kim Hyun-jung, floor spokesperson for the DPK, said such a process could leave Korea disproportionately constrained.

“If we go through ratification, only Korea ends up being legally bound,” Kim said, noting that the U.S. adjusted tariffs through executive orders without seeking legislative approval. “Strategically, we do not see a need to take that step.”

Trump's announcement has also raised suspicions that it is aimed at urging Korea to speed up implementing its first $20 billion annual investment in the U.S. as agreed in the MOU.

The Korean currency's weakness in recent months has been making the country undecided on when to start investing the first $20 billion installment. This situation has brought a rare verbal intervention by U.S. Treasury Secretary Scott Bessent earlier this month.

According to the MOU, however, the Korean government can request adjustments to the scale and timing of the annual investment when instability in foreign exchange markets is expected. The pending bill likewise establishes a framework for long-term investment but does not specify a fixed deployment schedule or completion deadline. Seoul maintains that slower investment spending alone does not mean the agreement has been violated.