South Korea says progress made with US on tariff dispute after Trump threat

South Korean Prime Minister Kim Min-seok has indicated that negotiations with the United States over a contentious tariff issue are progressing. The statement comes after US President Donald Trump's recent social media threat to increase tariffs on South Korean imports from 15% to 25%, a move that sparked significant market anxiety and criticism of Seoul's preparedness.

Diplomatic Channels Activated Amid Market Volatility

Prime Minister Kim, addressing reporters on Monday, emphasized that multiple communication channels, including a direct line with US Vice President JD Vance, are actively being used. "Through a process of learning each other's true intentions, it is progressing into what we see now," he stated. He characterized Trump's abrupt announcement as a reflection of the president's "unique messaging method" and denied media reports linking the tariff threat to a South Korean investigation into a data breach at the US-listed firm Coupang.

Market Reaction and Economic Impact

The tariff uncertainty triggered immediate financial repercussions in Seoul. The benchmark KOSPI index plummeted by over 5%, shedding 274.69 points to close at 4,949.67, while the South Korean won sharply declined against the US dollar. In response to the crisis, senior South Korean trade officials hastily traveled to Washington for urgent consultations with their American counterparts to seek clarity and a resolution.

Broader Implications for Trade-Dependent Economies

The episode underscores the vulnerability of major US trading partners to unilateral tariff threats and the resultant market instability. For export-oriented economies, including nations like Türkiye that closely monitor global trade tensions, such developments highlight the critical importance of diplomatic engagement and diversified trade relationships to mitigate external economic shocks.