President Donald Trump welcomes South Korean President Moon Jae-in in the White House in Washington, USA, May 22, 2018.
Carlos Barria | Reuters
Detroit – When President Donald Trump threatens to further increase the tariffs on US trading partners, the greatest influence on the auto industry outside of North America would be additional taxes on South Korea and Japan.
The East Asian countries produced a total of 16.8% of the vehicles sold in the United States last year, including a record of 8.6% from South Korea and 8.2% from Japan.
They were the largest vehicle importers in the United States outside Mexico – and they have hardly or no tasks compared to the 25% tariff that has impressive Trump in Canada and Mexico.
Car manufacturers like General Motors and based in South Korea Hyundai engine Export vehicles Zariffrei from South Korea. The country overtook Japan and Canada last year to become the second largest exporter of the new cars in the United States, based on sales.
It is only Mexico that made 16.2% of the US automotive purchases in 2024, reports Globaldata.
“Obviously Hyundai has a huge level of exposure. Therefore, GM … with relatively large volume models,” said Jeff Schuster, Global Vice President for Automotive Research near Globaldata. “There may be a lot of risk here, but it is limited, very limited to these two players.”
The imports from Japan are currently subject to a tariff of 2.5% for car manufacturers such as Toyota enginePresent Nissan engine And Honda engine. Vehicles from Japan represented around 1.31 million cars sold in the USA last year
The percentage of Japan's percentage has actually declined in recent years, while exports and sales of less than 845,000 in 2019 rose to more than 1.37 million in 2024.
South Korea has 0% tariffs for cars, although Trump re -negotiated a trade agreement with the country during his first term in 2018. This agreement was advertised to improve vehicle imports to South Korea, but it made little to do so
According to the International Commercial Commission, the business has also contributed little to increase automobile exports to South Korea. Exports of the US passenger vehicle to South Korea actually declined by around 16%.
Separated from cars, tariffs for trucks that are exported to the USA from South Korea and Japan, as well as 25%elsewhere.
A tariff is a tax on imports or foreign goods that are taken to the United States. The companies that import the goods pay the tariffs, and some experts fear that companies would simply pass on additional costs to consumers – increase the costs for vehicles and may reduce demand.
GM, Hyundai
The Hyundai based in South Korea is the largest exporter of vehicles to the United States, followed by GM and then Kia Corp., part of Hyundai, which largely works separately in the USA
GM has increased its imports from South Korea significantly in recent years. The US sales of South Korean vehicles largely have increased from 173,000 in 2019 to more than 407,000 in the previous year.
According to the car manufacturer's website, GM is the largest foreign direct investor in the Korean production industry. Since the foundation of the business in 2002, it has invested 9 trillion South Koreans (around 6.2 billion US dollars).
GM produces its crossovers from Buick Encore GX and Buick Envista as well as the Chevrolet Trailblazer and Chevrolet Trax Crossovers in plants in South Korea. The company has advertised the vehicles as the highlight for profitable growth of the car manufacturer in vehicles with lower margins and the entry level.
2024 Chevrolet Trax (left) and 2024 Buick Envista
Michael Wayland / CNBC
“We take costs for programs, improve the profitability and creation of vehicles that customers love, such as the new Chevy Trax and Buick Envista,” said GM President Mark Reuss at the company's investor in October. “Trax and Envista have contributed to increasing our share in the US SUV market for SUV to the highest level since 2007.”
GM and Kia refused to comment when they were asked for potential tariffs in South Korea. Hyundai has advertised his business and investments in the United States, which, according to the car manufacturer, was 20.5 billion US dollars since entering the market in 1986, but did not directly comment on potential tariffs.
“For almost four decades, Hyundai has been a driver for American growth and innovation, in which jobs, economic activities and investments have contributed to helping the Americans. We welcome the opportunity to work with the new administration to get American production Support to protect supply chains.
Terence Lau, Dean of the College of Law at Syracuse University, who previously as a trading expert for Ford enginesaid the automotive industry is based on free trade. If tariffs are implemented, the industry can adapt, but it takes time.
“The automotive industry can adapt to everything. Really, it can. It will always make products that customers want to buy because personal mobility and transport are a human need around the world,” he said. “What the auto industry cannot do well is turned onto a cent.”
Lau argued that a single -digit tariff can be a “annoyance”, but as soon as you have reached 10% or more, additional costs can really be eaten in the edge or products.
Tariff cherry picking
Ford engine CEO Jim Farley argued last week that, when tariffs affect the automotive industry, a “comprehensive” view of all countries in North America should be.
Farley has selected Toyota and Hyundai for the import of hundreds of thousands of vehicles annually in Japan or South Korea.
Jim Farley, CEO from Ford, posed for a photo at the start of the brand new Electric Ford F-150 Lightning Pickup in the Ford Rouge Electric Vehicle Center on April 26, 2022 in Dearborn, Michigan.
Bill Pugliano | Getty pictures
“There are millions of vehicles into our country that are not applied to them [incremental tariffs]”, Farley said with investors during the profit in the fourth quarter of the company.
“We cannot just turn one or the other place to the other place because this is a bonanza for our import competitors.”
The White House did not respond to a statement on potential tariffs in South Korea.
Trump signed a presidential memorandum on Thursday, which represented his plan to impose “mutual tariffs” for foreign nations, but did not detailed which countries could be targeted.
As a presidential candidate, Trump hovered the opportunity to impose general tariffs on all US imports. However, he also campaigned for the congress to adopt the so -called “Trump mutual trade law”, which would enable him to hit tariffs of a country's goods that have higher tariffs for goods produced in the USA.
– Kevin Breuninger from CNBC contributed to this report.
Comments are closed.