Trump Threatens Higher Tariffs on South Korea: Potential Ripples Across Autos, Pharma, Lumber and Sector ETFs

President Trump has posted a new announcement on Truth Social, the social media platform. He wrote:

“Our Trade Deals are very important to America. In each of these Deals, we have acted swiftly to reduce our TARIFFS in line with the Transaction agreed to. We, of course, expect our Trading Partners to do the same.

South Korea’s Legislature is not living up to its Deal with the United States. President Lee and I reached a Great Deal for both Countries on July 30, 2025, and we reaffirmed these terms while I was in Korea on October 29, 2025. Why hasn’t the Korean Legislature approved it?

Because the Korean Legislature hasn’t enacted our Historic Trade Agreement, which is their prerogative, I am hereby increasing South Korean TARIFFS on Autos, Lumber, Pharma, and all other Reciprocal TARIFFS, from 15% to 25%. Thank you for your attention to this matter!

DONALD J. TRUMP
PRESIDENT OF THE UNITED STATES OF AMERICA”

How Will Trump’s Statement Affect the Stock Market?

This latest post has the potential to affect the stock market. That’s because Trump’s threat to sharply raise tariffs on South Korean autos, lumber, and pharma could weigh on global sentiment and add volatility to Ford (F), General Motors (GM), Weyerhaeuser (WY), Merck (MRK), and Pfizer (PFE), as investors price in the risk of retaliatory measures and supply-chain disruptions. Broader U.S. sector and industry funds with industrial, consumer discretionary, and health care exposure—such as VIS, XLI, XLY, VCR, VHT, XLV, IYJ, and IBB—may see short‑term pressure from heightened trade uncertainty and potential shifts in costs and demand. The iShares MSCI South Korea ETF (EWY) is particularly vulnerable to downside as Korea faces both direct tariff hikes and the perception of increased political and trade risk, which could dampen foreign investment in Korean equities.

Here are some of the stocks that might be affected:
Ford Motor Company ((F)),
General Motors Company ((GM)),
Merck & Company ((MRK)),
Pfizer Inc ((PFE)),
Weyerhaeuser Company ((WY)),
Vanguard Industrials ETF ((VIS)),
Health Care Select Sector SPDR Fund ((XLV)),
Industrial Select Sector SPDR Fund ((XLI)),
Vanguard Consumer Discretionary ETF ((VCR)),
Vanguard Health Care ETF ((VHT)),
Consumer Discretionary Select Sector SPDR Fund ((XLY)),
iShares Biotechnology ETF ((IBB)),
iShares MSCI South Korea ETF ((EWY)),
iShares U.S. Industrials ETF ((IYJ)).