Washington: The U.S. administration, led by President Donald Trump, announced on Monday the initiation of a 15 percent tariff on Japanese automobiles starting this week, as part of a bilateral trade agreement. The decision follows an executive order signed by Trump earlier this month, formalizing the trade deal with Japan.

According to Yonhap News Agency, the new tariff rate, which reduces the previous 27.5 percent levy to 15 percent, is set to take effect on Tuesday, as indicated by a government notice on the Federal Register. The original tariff comprised a 2.5 percent duty and a 25 percent sector-specific tariff. Meanwhile, South Korean vehicles continue to be subject to the 25 percent sectoral tariff under Section 232 of the Trade Expansion Act of 1962, which permits tariff adjustments based on national security concerns.

The United States has also agreed to reduce the tariff on South Korean automobiles to 15 percent as part of a separate trade agreement, though the implementation timeline remains uncertain due to ongoing negotiations. The U.S. is a major destination for South Korean car exports, with 49.1 percent of South Korea’s total car exports, valued at $34.7 billion last year, heading to the U.S. Notably, Hyundai Motor Group and GM Korea exported approximately 970,000 and 410,000 units, respectively, to the U.S. market last year.