Washington: U.S. President Donald Trump announced a 25 percent tariff on all imported automobiles on Wednesday, as he is using tariffs to strengthen domestic manufacturing and pare down America's trade deficits. "What we are going to be doing is a 25 percent tariff on all cars that are not made in the United States," Trump told a press conference. "If they are made in the U.S., (there is) absolutely no tariff."
According to Yonhap News Agency, South Korean businesses have been closely watching Trump's tariff announcements as they are trying to minimize the potential impact of planned U.S. levies. The United States is a top auto export market for South Korea. Of South Korea's total car exports last year, exports to the U.S. were tallied at $34.7 billion, or 49.1 percent. Hyundai Motor Group and GM Korea exported around 970,000 and 410,000 units to the U.S., respectively.
No U.S. tariffs have been imposed on Korean cars since 2016 under a bilateral free trade agreement. Amid growing tariff pressure, Hyundai Motor Group on Monday announced its plan to invest US$21 billion in the United States through 2028. The plan consists of an investment of $8.6 billion for the automotive sector, $6.1 billion for the steel industry, component parts and logistics, and $6.3 billion for future industry sectors and energy.
The auto tariff announcement came as Trump is set to announce country-by-country reciprocal tariffs on April 2, a day he casts as "Liberation Day." Meant to match what other countries impose on U.S. exports, reciprocal tariffs are to be customized based on U.S. trading partners' tariff- and non-tariff barriers as well as other factors, including exchange rates and "unfair" trade practices.
U.S. industry groups have taken issue with various Korea-related trade issues, including Korea's age-based beef import restrictions, its online platform regulatory moves, and the "screen quota system" mandating local theaters to fill part of their screening time with Korean-produced flicks.