Covering the food & beverage industry, beauty, fashion, retail markets, the Ministry of Land, Infrastructure and Transport, the Ministry of Agriculture, Food and Rural Affairs and related people and entities worldwide
25% US tariff on Korean automobiles takes effect
Kia President and CEO Song Ho-sung, second from right, speaks to reporters at Hyundai Motor Group Metaplant America in Ellabell, Ga. during a construction completion ceremony for the plant, March 26 (local time). Courtesy of Hyundai Motor Group
By Ko Dong-hwan
The United States, Korea's largest automobile export destination, began slapping a 25 percent tariff on imported automobiles and related parts Thursday, alarming Korea’s automobile industry.
The tariff, which took effect at 1 p.m., applies to completed automobiles, engines, transmissions, electronic parts and powertrains, making Korean exports to the U.S. more expensive and less competitive against U.S.-made products that are exempt from the levy.
No U.S. tariffs had been imposed on Korean cars since 2016 under a bilateral free trade agreement.
The U.S. market last year accounted for 49.1 percent of Korea’s entire automobile exports. Out of $70.8 billion, exports to the U.S. were worth $34.7 billion. Hyundai Motor Group led the way, exporting 970,000 cars, while GM Korea shipped 410,000 automobiles.
U.S. President Donald Trump said at the While House on Wednesday (local time) that the U.S. will begin implementing reciprocal tariffs on products imported from countries it trades with, but the auto sector was excluded from the measure.
In response to the auto tariff, acting President and Prime Minister Han Duck-soo said that the government will unveil emergency response measures by next week.
Later in the day, Kia President and CEO Song Ho-sung said the company would analyze ways to respond swiftly and overcome the situation effectively once its internal direction was set.
Kia operates under the Hyundai Motor Group alongside Hyundai Motor Company.
"Kia has the flexibility and agility to respond quickly," he told reporters at the Seoul Mobility Show in Goyang, Gyeonggi Province.
Kia can manufacture automobiles at Hyundai Motor Group Metaplant America (HMGMA) in Ellabell, Georgia, avoiding the U.S. automobile tariff. The plant, which began operations last month, has an annual production capacity of 300,000 vehicles, with plans to expand to 500,000.
"Forty percent of all vehicles produced at HMGMA will be Kia cars," Song said.