Washington: U.S. President Donald Trump has declared his intention to announce tariffs on imported automobiles on April 2, in a move that could significantly impact the South Korean automotive sector. The announcement signals a continuation of Trump’s strategy to leverage tariffs as a means to reduce the U.S. trade deficit, bolster domestic manufacturing, and address broader policy issues.
According to Yonhap News Agency, Trump’s announcement could place South Korea, Asia’s fourth-largest economy, in a challenging position due to its significant trade surplus with the United States, which amounted to $55.7 billion last year. The U.S. is a crucial market for South Korean automobile exports, with $34.7 billion in cars exported to the U.S. last year, representing 49.1 percent of South Korea’s total car exports.
No tariffs have been placed on Korean cars entering the U.S. since 2016, thanks to a bilateral free trade agreement. However, the potential imposition of new tariffs comes as the Trump administration seeks to implement “reciprocal” tariffs that match those placed by other countries on American goods. This follows the administration’s earlier decision to impose a 25-percent tariff on steel and aluminum imports starting March 12, with considerations for similar measures on chips and pharmaceuticals.
The impending tariff announcement is being closely monitored by South Korean officials amid concerns about the potential for disrupted policy coordination with Washington. This comes at a time of political uncertainty in South Korea, following the impeachment of President Yoon Suk Yeol over a martial law attempt in early December.