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Economy March 8, 2026

Seoul Says U.S. Unlikely to Raise Tariffs if Investment Bill Clears Parliament

Industry minister indicates Washington has signalled restraint pending quick legislative approval of agreed U.S. investment commitments

By Derek Hwang
Seoul Says U.S. Unlikely to Raise Tariffs if Investment Bill Clears Parliament

South Korea's Industry Minister Kim Jung-kwan said on March 8 that the United States is unlikely to impose higher tariffs on South Korean imports if Seoul's parliament moves quickly to enact investment legislation tied to a bilateral trade agreement. The statement followed a meeting with U.S. Commerce Secretary Howard Lutnick and comes after U.S. threats to raise tariffs to 25% over delayed investment commitments.

Key Points

  • A prompt parliamentary enactment of the investment legislation could remove the immediate U.S. threat to raise tariffs.
  • The dispute centers on fulfilment of a $350 billion investment commitment under last year’s trade agreement.
  • Trade relations and cross-border investment flows between the U.S. and South Korea are directly implicated - with potential market sensitivity in trade-exposed sectors and investment flows.

SEOUL, March 8 - South Korea's Industry Minister Kim Jung-kwan said on Sunday that higher U.S. tariffs are unlikely provided Seoul follows through promptly on investment legislation the United States has been seeking.

Kim made the remarks after meeting with U.S. Secretary of Commerce Howard Lutnick. He said that, based on discussions with U.S. officials, Washington has expressed appreciation for South Korea's plans to approve the investment-related legislation and indicated it would not proceed with an official announcement to raise tariffs if the agreed measures are implemented.

The context for the exchanges is a dispute over the timing of South Korea's enactment of commitments to invest in the United States. Under a trade deal reached last year, South Korea agreed to direct investment into the U.S. totaling $350 billion. U.S. President Donald Trump had threatened to raise tariffs on South Korean imports to 25%, citing the delayed legislative action on those investment pledges.

Seoul has been engaged in talks with Washington to resolve the impasse. Kim's televised comments suggested the U.S. reaction would hinge on whether South Korea's parliamentary process results in the swift approval and implementation of the investment measures that are part of the bilateral agreement.

Separately, the ruling Democratic Party in South Korea scheduled a parliamentary vote for March 12 to pass a special bill intended to facilitate the investments in the United States contemplated by the trade deal, the party's floor leader said on Wednesday.

Analysis

Kim's public comments underscore the diplomatic and legislative dimensions of the dispute: Washington has tied the tariff threat to a specific implementation timeline for agreed investment commitments, while Seoul's parliamentary timetable will determine whether that threat remains on the table. The interaction between executive-level negotiations and legislative action in Seoul is the immediate channel through which the trade measures are being managed.

For markets and policymakers, the situation centers on the execution of a previously agreed $350 billion investment commitment and the timing of a planned parliamentary vote on March 12. Both the U.S. administration's stated tariff position and Seoul's legislative calendar are factual anchors in the ongoing discussions.

Summary of key facts

  • Industry Minister Kim Jung-kwan said the U.S. is unlikely to raise tariffs if Seoul implements the agreed investment measures.
  • Kim made the comments after meeting U.S. Secretary of Commerce Howard Lutnick.
  • The tariff threat from U.S. President Donald Trump was linked to delays in enacting commitments to invest $350 billion under last year's trade deal.
  • The ruling Democratic Party planned a vote on March 12 to pass a special bill to enable the investments under the trade deal.

Risks

  • If Seoul does not implement the investment measures as discussed, the U.S. has previously threatened to increase tariffs to 25%, creating uncertainty for exporters and trade-related sectors.
  • Timing risk tied to the March 12 parliamentary vote - any delay or failure to pass the special bill would leave open the possibility of U.S. retaliatory measures.

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