U.S. Treasury Secretary Scott Bessent declared on Wednesday that no trade agreement with South Korea would be valid until approved by the Korean Parliament.
During a CNBC interview, Bessent addressed President Donald Trump’s threat to raise tariffs on South Korean goods to 25%. He emphasized the necessity of signing a trade agreement and noted that the Korean National Assembly has yet to pass such an agreement.
Bessent further explained that until they ratify it, there is no trade agreement in place. They will face a 25% tariff until approval is granted.
He added that he believes this action will help move the situation forward.
The congressional approval Bessent referred to is likely the Korean National Assembly’s handling of the Special Act for U.S. Strategic Investment Management.
This bill, introduced by the Democratic Party of Korea following last November’s joint fact sheet on key U.S.-South Korea security and trade agreements, aims to establish a framework for U.S. investments, including the creation of a U.S.-Korea Strategic Investment Fund and a dedicated corporation.
The opposition People Power Party argues that the agreement is a significant trade matter requiring treaty ratification first, while the Democratic Party maintains that it’s a non-binding document akin to a memorandum of understanding, necessitating only legislative action.
On Monday, President Trump posted on Truth Social: Since the Korean legislature has not codified our historic trade agreement, it will raise tariffs on cars, lumber, pharmaceuticals, and all other mutual tariffs from 15% to 25%.
The following day (Tuesday), when questioned about Korean tariffs, Trump hinted at the possibility of delaying the increase, stating that it will work out a solution with Korea.
South Korean Minister of Trade, Industry and Energy Kim Jung-kwan arrived at Dulles International Airport near Washington, D.C., at 9:25 p.m. on Wednesday to engage in negotiations with U.S. officials. Kim plans to meet with key U.S. figures, including Commerce Secretary Howard Lutnick, while Yeo Han-koo, head of South Korea’s Trade Negotiation Office, is also expected to visit the U.S. soon.