Seoul: U.S. President Donald Trump's 25 percent tariffs on imported cars officially took effect Thursday, a move poised to significantly impact the South Korean automotive industry. The tariffs, part of Trump's broader strategy to reduce America's trade deficits and bolster domestic manufacturing, will extend to certain auto parts no later than May 3.
According to Yonhap News Agency, South Korean businesses have been closely monitoring Trump's tariff announcement, seeking ways to mitigate the potential impact of the new U.S. levies. The United States stands as a crucial auto export market for South Korea, with $34.7 billion, or 49.1 percent, of South Korea's total car exports last year headed to the U.S. Hyundai Motor Group and GM Korea were significant contributors, exporting approximately 970,000 and 410,000 units to the U.S., respectively, in the previous year.
No U.S. tariffs had been levied on Korean cars since 2016, thanks to a bilateral free trade agreement. However, amid the current tariff pressures, Hyundai Motor Group announced its intention to invest $21 billion in the United States through 2028, a strategic move likely aimed at easing potential repercussions from the tariffs.