Washington: U.S. President Donald Trump revealed plans on Friday to announce tariffs on imported cars, with a scheduled date of April 2. This move could pose a significant challenge to South Korea’s automotive industry, a key player in the global market.
According to Yonhap News Agency, President Trump has emphasized using tariffs as a strategic tool to address America’s trade deficit, promote domestic manufacturing, and meet other policy objectives such as curbing unauthorized migration and drug trafficking. These impending auto tariffs are consistent with his administration’s broader approach of implementing “reciprocal” tariffs to equalize trade conditions with other nations.
The announcement has sparked concerns in South Korea, Asia’s fourth-largest economy, which has a substantial trade surplus with the United States, amounting to US$55.7 billion last year. South Korea’s automotive sector, reliant on exports to the U.S., could be significantly impacted as nearly half of its car exports, valued at $34.7 billion last year, were destined for the American market. Under a bilateral free trade agreement, Korean cars have been exempt from U.S. tariffs since 2016.
The Trump administration’s focus on matching tariffs imposed by other countries on American goods has already led to a 25 percent tariff on steel and aluminum imports starting March 12, with potential new tariffs on chips and pharmaceuticals under consideration. These developments are being closely monitored by South Korean officials, particularly in light of the political uncertainty in Seoul following the impeachment of President Yoon Suk Yeol.
South Korean Foreign Minister Cho Tae-yul plans to address the tariff issue with U.S. Secretary of State Marco Rubio during their upcoming meeting at an international security forum in Munich, Germany. This dialogue highlights the importance of maintaining strong bilateral relations amid evolving trade policies.
Furthermore, President Trump has previously imposed a 10 percent tariff on all Chinese goods entering the U.S. and has temporarily suspended a 25 percent tariff on Canadian and Mexican imports following agreements to enhance border security and combat drug trafficking.