FILE PHOTO: KIA Motors' vehicles are parked to be exported, at a port in Pyeongtaek, South Korea, July 31, 2025. REUTERS/Kim Hong-Ji/File Photo
WASHINGTON/SEOUL, Jan 28 (Reuters) - President Donald Trump said on Tuesday the United States and South Korea would work out a solution, in response to a query about his surprise threat a day earlier to step up tariffs to 25% on imports from the Asian ally.
The news rattled officials in Seoul who said Trump caught them by surprise with a social media post on Monday vowing higher duties on autos and other goods because South Korea had not lived up to its part in the trade deal struck last year.
As he left the White House to give a speech in Iowa, Trump told reporters, "We'll work something out with South Korea." But he did not elaborate.
Trump's chief trade negotiator, Jamieson Greer, said the U.S. had cut to 15% its tariff rate on South Korean goods from 25%, in exchange for Seoul's pledge to invest $350 billion in the United States, allow more U.S. cars into South Korea, and eliminate some non-tariff barriers.
"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 the export-heavy economy had not met commitments on agriculture, industry and digital services.
Greer said the U.S. trade deficit with South Korea, which had ballooned to $65 billion during the Biden administration, was "not sustainable and it has to change."
South Korea's parliament is not expected to hold a plenary session until February to vote on bills.
Five bills that would enact the U.S. investment are pending and ruling Democratic Party members have expressed hope to approve them in February.
The United States has also expressed concern that a South Korean law passed last year tightening oversight of digital services and proposed legislation to regulate online platforms could discriminate against U.S. companies.
A source familiar with internal discussions between the countries has said Trump may have been prompted by recent Korean regulatory actions against Coupang, a U.S.-listed company that has said the moves are unfair and discriminatory.
On Wednesday, South Korean Foreign Minister Cho Hyun said Seoul reached out to the U.S. State Department after Trump's vow to raise tariffs, adding, "It is our conclusion there is no direct link to Coupang or the (proposed) online platform law."
South Korea's policy chief Kim Yong-beom said he hopes parliament will approve bills required to kickstart the investment in February, although outflows could take monthsto begin.
"If we are asked to review a specific (investment project), we can look at what it is," Kim said.
"But conducting a proper review requires some serious manpower and budget, meaning we cannot deep dive on those reviews unless relevant law exists."
Finance Minister Koo Yun-cheol told Reuters this month that South Korea plans to adopt the investment package as soon as possible, while warning it could be affected by uncertainty over a U.S. Supreme Court ruling expected soon on Trump's tariffs.
But he highlighted prospects for the timeline to be stretched with remarks that the planned investment of $350 billion was unlikely to kick off in the first half of 2026, against a backdrop of weakness in the won currency.
(Reporting by Trevor Hunnicutt and Jasper Ward in Washington and Jack Kim, Joyce Lee, Jihoon Lee and Cynthia Kim in Seoul; Writing by Andrea Shalal; Editing by Chris Reese, Franklin Paul and Michael Perry)
