"‘The Worst Was Avoided’... Auto Industry Spared from Reciprocal Tariffs, What’s the Strategy? [Trump Tariffs]"

# U.S. Imposes 25% Tariffs on South Korean Goods, Excludes Automobiles from Additional Duties The Trump administration's latest trade move has imposed a 25% reciprocal tariff on South Korea's exports, but South Korean automobiles, which are already subject to the existing 25% tariff, have been excluded from any additional levies. This decision comes as a relief to the South Korean automotive sector, which had feared further trade penalties. Experts note that while the exclusion of additional tariffs prevents the worst-case scenario, the initial 25% tariff alone still poses significant challenges for South Korean carmakers. Competition in the U.S. auto market is likely to intensify as European, Japanese, and Chinese vehicles face an identical tariff rate of 25%. # U.S. to Proceed with 25% Tariff on All Imported Automobiles The White House, on April 3, confirmed it would not apply reciprocal tariffs on vehicles and auto parts, but would enforce a 25% import tariff on automobiles, effective 12:01 a.m. Eastern Time. The move is in line with previously issued policy announcements. Industry watchers express concern that the unilateral tariff, while uniform across all car-importing nations, could disrupt competitive dynamics in the U.S. market. South Korean, European, Japanese, and Chinese auto companies, all subject to the same 25% tariff, may face heightened price sensitivity among American consumers. # Impact on South Korea’s Automotive Industry The U.S. represents nearly half—49.1%—of South Korea's auto export volume, reflecting heavy reliance on the American market. Analysts caution that even without additional tariffs, the initial 25% rate will likely inflict substantial financial damage. General Motors Korea (Korea GM) stands out as particularly vulnerable. The automaker exports approximately 85% of its production to the U.S. Any prolonged tariff imposition could threaten the survival of GM's Korean operations, with some speculating potential withdrawal scenarios. However, South Korea is not alone in facing the impact. All imported vehicles are now priced under equal tariff conditions, making competition uniform but tighter. European and Japanese carmakers, which compete with South Korea's Hyundai and Kia in the U.S., are equally affected by the tariff. # Calls for Further Tariff Reductions Highlight Future Negotiations Some industry insiders remain cautiously optimistic that tariffs for South Korean cars could be reduced over time, citing Hyundai Motor Group's major commitments to the U.S. economy. The company plans to invest $21 billion—approximately 31 trillion won—through 2028, building significant goodwill with U.S. policymakers. Hyundai Motor Group Chairman Chung Eui-sun has emphasized the strategic importance of ongoing dialogue following this tariff announcement. Speaking at the inauguration of Hyundai’s new plant, Meta Plant America, in Georgia, Chung highlighted the need for continued negotiations between corporate stakeholders and governments. "In light of President Trump's tariff policy announcement starting April 2, the critical period lies ahead," said Chung. "Both governments and individual corporations must remain engaged in negotiations. This is only the beginning." South Korean industry officials are optimistic that proactive measures, including Hyundai's investment commitments, may provide leverage in mitigating the tariff burden over time. Yet, the effectiveness of this negotiation strategy remains uncertain as U.S. trade policies continue to evolve under the current administration.