Jane Han is the North America editor for The Korea Times. Based in Seattle, she has covered business, culture and social issues across the United States for over 15 years. She previously worked at The Boston Globe.
Korea left behind as US lowers auto tariffs for Europe, Japan
Export-bound vehicles are lined up at Pyeongtaek Port in Gyeonggi Province in this July photo. Yonhap
By Jane Han
WASHINGTON — The U.S. has finalized agreements to cut tariffs on imported cars from both Europe and Japan, leaving South Korea as the only major auto exporter still facing a hefty 25 percent duty.
The U.S. Commerce Department confirmed this week that tariffs on European cars and auto parts will drop to 15 percent, retroactive to August 1, under a trade deal reached in July. Japan secured the same rate earlier this month after wrapping up its own negotiations with Washington.
The moves significantly improve the competitiveness of European and Japanese automakers in the world’s second-largest car market.
South Korea, by contrast, has yet to benefit.
Seoul reached a preliminary understanding with the U.S. in July to cut tariffs to 15 percent, but follow-up talks have stalled. As a result, Korean automakers — led by Hyundai and Kia — continue to pay 25 percent on vehicles shipped to the U.S., a key market that accounts for a major share of their global sales.
Industry analysts warn the gap could hurt Korean firms’ pricing power at a time of slowing demand and fierce competition from electric vehicle makers.
With Europe and Japan now enjoying lower tariffs, the Lee administration faces growing pressure to move swiftly. The longer negotiations drag on, the greater the risk that Korea’s top exporters lose ground in their most critical overseas market.