Trump vows to 'work something out' with South Korea after 25% tariff threat

US cut rate to 15% after Seoul pledged $350bn investment but disputes remain over unfulfilled commitments

President Donald Trump on Tuesday said that the United States and South Korea will work out a solution when asked about his surprise Monday announcement that he would increase tariffs on imports from the Asian ally to 25%.

"We'll work something out with South Korea," Trump told reporters as he left the White House to give a speech in Iowa. He did not elaborate.

Trump's chief trade negotiator, Jamieson Greer, said the US had reduced its tariff rate on South Korean goods to 15% from 25% in exchange for Seoul's pledge to invest $350 billion in the US, allow more US cars into South Korea, and eliminate some non-tariff barriers.

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"But, in the meantime, they haven't been able to get a bill through to do the investment," Greer said on Fox Business Network, adding that Seoul had also failed to meet its commitments on agriculture, industry and digital services.

In a social media post on Monday, Trump said he was raising US duties on imports of South Korean autos and other goods because its parliament had not lived up to its part of a deal he had reached with its president last year.

The news rattled officials in Seoul and left them scrambling to find a response to what could be a blow for the export-heavy country.

Greer said the US trade deficit with South Korea had ballooned to $65 billion during the previous Biden administration and that was "not sustainable and it has to change."

South Korea's parliament is not expected to sit for a plenary session until February to vote on bills. Five bills that would enact the US investment are pending and ruling Democratic Party members have expressed hope to approve them in February.

The US has also expressed concern that a South Korean law passed late last year tightening oversight of digital services and a proposed legislation aimed at regulating online platforms could discriminate against US companies and create barriers for them.

A source familiar with internal discussions between the countries has said Trump may have been prompted by recent Korean regulatory actions against Coupang CPNG.N, a US-listed company that has said the moves are unfair and discriminatory.

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On Wednesday, South Korean Foreign Minister Cho Hyun said Seoul reached out to the US State Department after Trump's vow to raise tariffs and that "it is our conclusion that there is no direct link to Coupang or the (proposed) online platform law."

Earlier this month, South Korea's Finance Minister Koo Yun-cheol told Reuters the government planned to implement the investment package as soon as possible, while noting that uncertainty over a US Supreme Court ruling on Trump's tariffs expected soon could affect the process.

But highlighting how the timeline may be stretched, he said the planned investment of $350 billion was unlikely to kick off in the first half of 2026, given the weakness in the won.