Hyundai Motor seeks earlier auto tariff relief via Lee-Trump summit

President Lee Jae Myung shakes hands with Hyundai Motor Group Executive Chair Chung Euisun at the presidential residence in Seoul, July 14. Courtesy of presidential office

Next week's summit between President Lee Jae Myung and U.S. President Donald Trump could be a major turning point for Hyundai Motor Group, which is hoping for the immediate implementation of the agreed tariff cut on Korean vehicles, industry officials said Sunday.

It has been more than two weeks since Seoul and Washington reached a trade deal that will reduce both the blanket tariff and the U.S. auto tariff on Korean-made automobiles and auto parts by 10 percentage points, from 25 percent to 15 percent.

However, Korean carmakers are still subject to the existing 25 percent tariff on exports to the U.S., as an additional executive order by Trump is required to enact the new auto tariff, unlike the blanket tariff.

To this end, Hyundai Motor Group Executive Chair Chung Euisun will join Lee’s U.S. trip as a member of the business delegation, raising the possibility of a second meeting for him with Trump this year alone. In May, Chung visited the White House to announce the group’s $21 billion (29.2 trillion won) investment in the U.S.

Hyundai Motor Group Executive Chair Chung Euisun, second from left, delivers remarks as U.S. President Donald Trump stands in the Roosevelt Room at the White House in Washington, March 24. AP-Yonhap

According to industry officials, it remains possible that Trump will sign the additional administrative order for the implementation of the auto tariff cut on the sidelines of the summit.

“Trump enjoys hyping up his achievements, and his first summit with Lee will likely be used as a major political event to unveil details of the latest trade agreement between the two countries,” an official from the industry.

If Trump does not move quickly to implement the trade deal, Korean companies will continue to shoulder a serious financial burden, the official warned.

According to a recent regulatory filing, Hyundai Motor suffered an operating profit fall of 828.2 billion won due to U.S. tariffs during the second quarter of this year. The tariffs also hit Kia’s earnings, with its estimated operating profit fall from the tariff coming in at 786 billion won during the same period.

Other industry officials urged local firms to prepare for the worst-case scenario due to Trump’s unpredictability.

“If Trump does not sign any additional administrative order for the auto tariff implementation, Korean carmakers and parts suppliers will have to continue to bear the huge financial burden for at least a few more weeks, so companies have to brace for the scenario,” another industry official said.

Along with Chung, the heads of Samsung Electronics, SK Group and LG Group will also accompany Lee.