Hyundai and General Motors are poised to benefit significantly from a recent reduction in tariffs on vehicles imported from South Korea. The tariff decrease from 25% to 15% will notably lower import costs for brands such as Hyundai, Kia, Genesis, and General Motors, which collectively import hundreds of thousands of vehicles each year. This shift in trade policy is expected to translate into substantial savings for these automakers.
Hyundai is projected to import over 951,000 vehicles to the United States in 2024, slightly down from approximately 964,000 in 2023. According to data from GlobalData, General Motors is also a major player in this market, having imported 407,226 vehicles from South Korea last year, including popular models like the Chevrolet Trax and Buick Encore GX. This figure is anticipated to increase to 422,000 vehicles in the current year.
The tariff cuts are a welcomed development for both automakers. General Motors has publicly acknowledged the positive impact of this change. In a statement to CNBC, the company noted, “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. We will be monitoring and reviewing the details.”
Hyundai, which dominates the Korean car market in the U.S., is also optimistic about the tariff reduction. Hyundai North America chief executive Randy Parker expressed cautious optimism, stating, “Getting to 15% is a great milestone. It’s been quite the journey reaching this agreement, which has been, I would say, quite extensive.”
As the year progresses, it is estimated that approximately 1.37 million vehicles will be imported from South Korea to the United States, positioning the country as the second-largest source of imported vehicles, just behind Mexico. This accounts for around 8.6% of all U.S. car sales.
The implications of this tariff reduction extend beyond immediate financial benefits. The shift in policy is indicative of changing trade relations and may influence future negotiations between the United States and South Korea.
As automakers adjust to these new tariffs, the landscape of the automotive market in the U.S. may witness significant developments in both pricing and availability of vehicles. This change represents a pivotal moment for companies like Hyundai and General Motors, allowing them to better compete in a market increasingly shaped by international trade dynamics.