Sign in Subscribe
Tariffs

Hyundai Motor Group Awaits Trump's Signature for Tariff Cut

Strategic Insights

— 1 min read

Hyundai Motor Group's hopes for the immediate implementation of a trade deal that will reduce tariffs on Korean vehicles to the US are hanging in the balance. The deal, reached between Seoul and Washington over two weeks ago, awaits an additional executive order from US President Donald Trump to take effect. Industry officials say that if Trump does not sign the order, Korean carmakers will continue to bear a significant financial burden due to existing 25% tariffs on exports to the US.

Key Takeaways:

  • Hyundai Motor Group Executive Chair Chung Euisun will join President Lee Jae Myung's US trip as a member of the business delegation, raising the possibility of a second meeting with Trump this year.
  • The trade deal, which was reached between Seoul and Washington over two weeks ago, will reduce both the blanket tariff and the US auto tariff on Korean-made automobiles and auto parts by 10 percentage points, from 25% to 15%.
  • If Trump does not sign the additional executive order, Korean carmakers will continue to shoulder a significant financial burden due to existing 25% tariffs on exports to the US.
  • Hyundai Motor suffered an operating profit fall of 828.2 billion won due to US tariffs during the second quarter of this year, while Kia's estimated operating profit fall from the tariff came in at 786 billion won.
  • Industry officials are urging local firms to prepare for the worst-case scenario due to Trump's unpredictability.

Statistics:

  • 10 percentage points: the reduction in both the blanket tariff and the US auto tariff on Korean-made automobiles and auto parts.
  • 25%: the existing tariff rate on Korean car exports to the US.
  • 15%: the proposed tariff rate after the trade deal takes effect.
  • $21 billion (29.2 trillion won): Hyundai Motor Group's investment in the US announced by Chung in a visit to the White House in May.
  • 828.2 billion won: Hyundai Motor's operating profit fall due to US tariffs during the second quarter of this year.
  • 786 billion won: Kia's estimated operating profit fall from the tariff during the same period.

Sources:

  • Industry officials (no further details provided)
  • Hyundai Motor Group regulatory filing (no specific date or title mentioned)
  • A recent regulatory filing by Hyundai Motor Group
  • The official from the industry (no further details provided)

Read more