Auto parts exports to US fall for 1st time in 5 yrs in 2025

Cars await shipment at a port in Pyeongtaek, Gyeonggi Province, Jan. 27. Yonhap

Korea's exports of auto parts to the United States fell in 2025 for the first time in five years, data showed Sunday, as domestic automakers expanded local sourcing in the U.S. amid tariff measures.

Shipments of automotive parts to the U.S. declined 6.7 percent from a year earlier to $7.67 billion last year, according to data compiled by the Korea Auto Industries Cooperative Association. It marked the first annual fall since 2020, when exports fell 11.5 percent.

Exports to Korea's largest overseas market had since risen steadily in recent years, increasing from $6.91 billion in 2021 to $8.03 billion in 2022, $8.08 billion in 2023 and $8.22 billion in 2024.

The association said proposed 25 percent tariffs on auto imports under the Donald Trump administration dealt a serious blow to Korea's automotive exports and the broader industry.

Industry analysts said the higher tariffs prompted automakers, including Hyundai Motor Co. and Kia Corp., to expand local parts procurement in the U.S.

The U.S. began imposing a 25 percent tariff on imported auto parts in May last year. Under an agreement between Seoul and Washington, tariffs on Korean auto parts were later reduced to 15 percent, retroactive to Nov. 1.

However, Trump threatened to raise "reciprocal" tariffs and auto, lumber and pharmaceutical duties on Korea to 25 percent from 15 percent, citing a delay in the parliamentary process to pass a special investment bill facilitating the implementation of a trade deal reached by the two countries.

Under the trade deal, Korea has committed to investing $350 billion in the U.S., among other pledges, in return for the U.S. lowering reciprocal tariffs on Korea to 15 percent from 25 percent.