The Trump administration has cut tariffs on South Korean vehicle imports from 25% to 15%, providing major relief to Hyundai Motor Group and General Motors in the U.S. market. This Federal Register-documented deal, mirroring pacts with Japan and the UK, was bolstered by South Korea’s $350 billion U.S. investment pledge, easing prior tensions.
Hyundai, the top South Korean vehicle importer to the U.S., incurred 1.8 trillion won in Q3 tariff costs, up from 828 billion won previously. GM forecasts 2025 tariff hits at $3.5-4.5 billion, mainly from South Korea and Mexico, but has offset much of the Korean portion.
GM CFO Paul Jacobson stated at a UBS conference, “We do think that is going to be a tailwind next year, just not as much as the whole 50% because the ultimate tariff bill that we’re going to pay this year for Korea was going to be a lot lower than the $2 billion from the stuff that we’ve been working on.”
GlobalData predicts 1.37 million South Korean vehicles (8.6% U.S. market share) in 2025, with Hyundai targeting 951,000 imports in 2026 and 80% local US production by 2030 (from 40% now).
GM expects 422,000 Korean imports this year, up 3.6%, for models like Chevrolet Trax/Trailblazer and Buick Encore GX/Envista, noting, “GM’s long-standing Korea operations produce high-quality, affordable crossovers that complement our U.S. vehicles and domestic production, which will soon rise to 2 million units.”
Hyundai North America CEO Randy Parker said, “15% is still 15%. Getting to 15% is a great milestone. It’s been quite the journey reaching this agreement, which has been, I would say, quite extensive.”
“Korea’s commitment to American investment strengthens our economic partnership and domestic jobs and industry. We are also grateful for the deep trust between our two nations,” U.S. Commerce Secretary Howard Lutnick added.
The pact follows a September raid detaining 475 at a Hyundai-LG Georgia plant, now enabling cost savings for Hyundai, Kia, GM, and Polestar.