Trump’s South Korea tariff cuts are major boost for Hyundai and GM

US Tariffs on South Korean Imports to be Lowered to 15%

The United States has announced plans to lower tariffs on certain products, including vehicles, from South Korea to 15% from the current 25%. This move is expected to greatly benefit Hyundai Motor and General Motors, two of the largest importers of vehicles from South Korea. The reduction in tariffs is a result of a trade deal between the US and South Korea, which aims to strengthen economic ties and promote domestic jobs and industry.

Impact on Hyundai and General Motors

Hyundai Motor, the largest US importer of new vehicles from South Korea, is expected to be one of the biggest beneficiaries of the lowered tariffs. The company has paid billions of dollars in levies so far this year, with US tariffs costing the company 1.8 trillion won ($1.2 billion) in the third quarter alone. General Motors, which imports nearly 422,000 vehicles from South Korea to the US each year, is also expected to benefit from the reduced tariffs. The company had initially expected tariffs on South Korean imports to cost $2 billion but has been able to offset many of those costs.

GM CFO Paul Jacobson stated that the company expects the levies to cost closer to $1 billion or less in 2026, citing the company’s efforts to offset the costs. Hyundai North America CEO Randy Parker also welcomed the reduction in tariffs, stating that 15% is still a significant amount but a great milestone. The company aims to have more than 80% of its US vehicle sales produced locally by 2030, up from roughly 40% currently.

US-South Korea Trade Deal

The US-South Korea trade deal comes after South Korea officially introduced legislation in its parliament aiming to fulfill its promise to invest $350 billion in the US over several years. The deal is seen as a significant step forward in strengthening economic ties between the two countries. US Commerce Secretary Howard Lutnick praised the deal, stating that Korea’s commitment to American investment strengthens the economic partnership and domestic jobs and industry.

The deal also comes months after a period of tension between the two countries following an immigration raid at a battery plant jointly owned by Hyundai and LG Energy Solution in Georgia. The raid resulted in the arrest of over 475 workers, including more than 300 South Koreans. Despite this, the trade deal is expected to promote cooperation and investment between the two countries, with Hyundai aiming to increase its US production and reduce its reliance on imports.