Hyundai Motor Company and KIA aim to boost American car production in order to avoid the 25% automobile fare planned by President Donald Trump.
Tuesday's Trump I said The tariff rate for automobile imports is “nearly 25%”, with details written in early April.
He pointed out that he gives the car manufacturer time to avoid the fees.
“If they had plants and factories here, there would be no tariffs,” the 47th president said.
Both automakers are aiming to increase domestic production of their vehicles by 70% using large factories in Georgia, opening in March.
When asked in January about how the company would respond to Trump's tariffs, Koo Za-yong, executive vice president of investor relations at Hyundai, said, “It may take some time, but we are The ultimate goal of the company is to localize production to minimize the impact of tariffs. Threat.
“If tariff issues come to fruition, Hyundai can cover up to 80% of US sales in US production. The Alabama factory has 400,000 cars and the Georgia factory has 350,000 capacity Because,” he added.
South Korea's main exports are automobiles, consisting of 27.2% of the country's total exports, totaling $34.74 billion in 2024.
The IBK Economic Research Institute said that a 25% tariff on foreign cars would lower car exports to the US to 18.6%.
Korea's Junggan Daily It has been reported:
KB Securities also said in its report that if Trump minimizes the rate to 10%, Hyundai Motor and Kia will suffer a cut in operating profit of at least 4.3 trillion won. A simple calculation with a 25% tariff could result in an impact of around 10 trillion won.
KIA, which has a manufacturing plant in Mexico, is considering overhauling its supply chain and shipping the majority of its vehicles to Canada, as both countries do not have a customs system. Trump has previously declared a 25% tariff on all products coming from Mexico.
“Hyundai can offer an expansion of the US capabilities as a negotiation chip at the negotiation table with Trump. However, increasing capacity means more investment. Hyundai already has many. We are investing and Trump's tall order is doing more,” said Lee Hang-Gu, a researcher at consulting firm Automotive Intelligence Networks.
“The situation is very serious and even more stringent for GM South Korea. Almost 90% of the production vessels are shipped to the US market,” he added.
Nissan CEO Uchida said on February 13 that Trump's tariffs on Mexico could move automobile production abroad.
“From Mexico to the US, we export a considerable number of cars this fiscal year. […] 320,000 units are exported from Mexico to the US. If you are subject to high tariffs, you must be prepared for this. While we are monitoring the situation, that's true,” Uchida said.
“We export in large quantities, so if there are high tariffs, this will have a big impact on our business, so we need to monitor this carefully,” Uchida continued.
Sean Moran is a policy reporter for Breitbart News. Follow him with x @seanmoran3.
