As Trump eyes more tariffs, South Korea remains safe haven for GM and Hyundai

Detroit -since President Donald Trump threatens to further increase the rates for the American trading partners, would be the biggest impact for the car industry outside North -America is extra taxes in South Korea and Japan.

The East Asian countries produced a combined 16.8% of the vehicles that were sold in the US last year, including a record of 8.6% from South Korea and 8.2% from Japan, according to data on by Globaldata CNBC are provided.

They were the largest vehicle importers for the US outside of Mexico – and they have little to no tasks compared to the 25% rate that Trump has threatened to impose on Canada and Mexico.

Car manufacturers such as General Motors and South Korea established Hyundai -Motor Vehicles export tariff-free from South Korea. Last year the country caught up with Japan and Canada to become the second largest exporter of new cars to the US, based on sales.

It only follows Mexico, which represented 16.2% of the American automatic sales in 2024, Globaldata reports.

“It is clear that Hyundai has an enormous amount of exposure. Behind it is GM … with relatively large volume models,” said Jeff Schuster, global vice president of Automotive Research at Globaldata. “There is a lot of risk here, but it is limited, really limited, to those two players.”

The entry from Japan is currently subject to a rate of 2.5% for car manufacturers such as Toyota -Motor” Nissan -Motor And Honda -Motor. Vehicles from Japan represented around 1.31 million cars that were sold in the US last year

The Japanese percentage of sales has actually fallen in recent years, while the export and the turnover of South Korea have continued to rise from less than 845,000 in 2019 to more than 1.37 million in 2024.

Zuid -Korea has 0% rates for cars despite Trump who re -negotiate a trade agreement with the country during its first term in 2018. That

The deal has also done little for increasing the export from cars to South Korea, according to data from the International Trade Commission. The export of the American passenger vehicle to South Korea has actually decreased by around 16%.

Separately from cars are rates for trucks that are exported from South Korea and Japan to the US, as well as elsewhere, 25%.

A rate is a tax on import or foreign goods, brought in the United States. The companies that import the goods pay the rates, and some experts fear that the companies would simply pass on any additional costs to the consumer – increase the costs of vehicles and possibly reduce demand.

Hyundai from South Korea is the largest exporter from vehicles to the US, followed by GM and then Kia Corp., a part of Hyundai that largely works separately in the US

GM has raised its import from South Korea in recent years. The American sale of South Korean-produced vehicle-part-part entry-level is, according to globaldata, rose from 173,000 in 2019 to more than 407,000 last year.

GM is the largest direct foreign investor in the production industry of Korea, according to the website of the automaker. It has won 9 trillion South Koreans (around $ 6.2 billion) invested since the establishment of the activities in 2002.

GM produces his Buick Encore GX and Buick Envista crossovers, as well as the Chevrolet trail blower and Chevrolet Trax Crossovers, in plants in South Korea. The company has advertised the vehicles as a pinnacle for the profitable growth of the car maker in vehicles at a lower margin, entry -level vehicles.

“We take the costs of programs, improve profitability and creating vehicles that customers love, such as the new Chevy Trax and the Buick Envista,” said GM President Mark Reuss during the company's investor day in October. “Trax and Envista have helped to increase our share in the American small SUV market to the highest level since 2007.”

GM and Hyundai did not respond immediately when asked about possible rates in South Korea. Kia refused to comment.

Terence Lau, dean of the College of Law at Syracuse University who previously worked as a trading expert for Ford -Motorsaid that the car industry was built on free trade. If the rates are implemented, the industry can adjust, but it takes time.

“The car industry can adapt to everything. Really, it is possible. It will always make product that customers want to buy, because personal mobility and transport is a human need around the world,” he said. “What the car industry cannot do well is running a dime.”

Lau argued that a rate with one digit can be a 'nuisance', but once they have hit 10% or more, extra costs can really eat in the margin or products.

Ford -Motor CEO Jim Farley argued last week that if Trump starts to implement rates that influence the car -industry, it should take an “extensive” look at all countries to even play the playing field in North -America.

Farley has chosen Toyota and Hyundai for importing hundreds of thousands of vehicles per year from Japan and South Korea respectively.

“Millions of vehicles are coming to our country that are not applied to these [incremental tariffs]”Farley said during the company's profit call in the fourth quarter with investors.” So if we have a rate policy … it is better expanded for our industry.

“We can't just choose on one place or the other, because this is a Bonanza for our import competitors.”

The White House did not respond for comments on possible rates in South Korea.

Trump set up a news conference of Oval Office to discuss his plan to impose mutual rates at other countries for Thursday at 1 p.m., but it is unclear whether South Korea and Japan would be recorded.

Republican American house speaker Mike Johnson told Reuters on Wednesday that he believed that Trump is considering exemptions that would include the car and pharmaceutical industry.