On the 27th, the won-dollar exchange rate against the U.S. dollar closed at 1,446.2 won, up 5.6 won from the previous day. It was the first higher close in five sessions since on the 20th. This was interpreted as a reaction to increased aversion to risk assets after U.S. President Donald Trump said he would raise the tariff on Korean automobiles.
That day, the won-dollar exchange rate opened at 1,450 won, up 9.4 won from the previous day. After rising to as high as 1,461 won right after the open, the won-dollar exchange rate gradually narrowed its gains ahead of the weekly transaction close (9 a.m.–3:30 p.m.). Even so, it closed more than 5 won higher than the previous day.
The upward trend in the won-dollar exchange rate was interpreted as being due to President Trump saying he would raise the reciprocal tariff imposed on Korean automobiles, lumber, pharmaceuticals, and other items to 25% from the existing 15%. On the 26th (local time), President Trump posted on his social networking service Truth Social, saying, "Korea's legislature is not implementing the deal with the United States," and that he would raise the tariff.
Last year, the United States set the tariff cap on Korean products at 15%, and Korea pledged to invest $350 billion in the United States. Trump's SNS post was his response of raising the tariff, taking issue with the delay in related legislation on investment in the United States in the National Assembly.
However, the won-dollar exchange rate did not surge past the 1,450-won level. Some analysts said the possibility that U.S. and Japanese foreign exchange authorities would intervene in the market to address the weak yen limited the exchange rate's gains. Recently, the won has tended to move in tandem with the yen, meaning that if U.S. and Japanese authorities prevent the yen from depreciating, the won sees the same effect.
Min Kyung-won of Woori Bank said, "(President Trump saying he would raise the tariff on Korean automobiles and other items to 25%) is a bearish factor for the won," but added, "Yen-strengthening pressure stemming from the possibility of coordinated market intervention by U.S. and Japanese foreign exchange authorities supports the top end of the exchange rate."