American flags fly outside a Hyundai car dealership in Irvine, California, United States, March 27, 2025.
Mike Blake | Reuters
DETROIT — Hyundai Motor and General engines are expected to be two of the biggest beneficiaries of lower U.S. tariffs on imports, including vehicles, from South Korea.
The South Korean automaker is the largest U.S. importer of new vehicles from the country, followed by GM. The two automakers have paid billions of dollars in taxes so far this year after President Donald Trump imposed 25% tariffs on vehicles imported from South Korea and other countries in the spring.
The Trump administration confirmed last week its intention to lower tariffs on certain products, including vehicles, from South Korea to 15%. A notice regarding the implementation of the trade agreement was published Wednesday in the Federal Register. Other countries like Japan and the United Kingdom have also negotiated lower tariff rates with the Trump administration.
Before the reduction, Hyundai announced that U.S. tariffs cost it 1.8 trillion won ($1.2 billion) in the third quarter, compared to 828 billion won ($565 million) in the previous quarter. GM recently said its tariff impacts, mainly from South Korea and Mexico, are expected to be between $3.5 billion and $4.5 billion in 2025.
GM Chief Financial Officer Paul Jacobson said Wednesday that the automaker initially expected tariffs on South Korean imports to cost $2 billion, but the company was able to offset much of those costs. He said GM expects taxes to cost closer to $1 billion or less in 2026.
“We think it will be a tailwind next year, but not as much as the 50%, because the final tariff bill we’re going to pay this year for Korea will be much less than the $2 billion that came from the things we’ve been working on,” Jacobson said at a conference at UBS.
The announcement of the U.S. tariffs comes after South Korea formally introduced legislation in parliament aimed at fulfilling its promise to invest $350 billion for the United States over several years.
Euisun Chung, executive chairman of Hyundai Motor Group, delivers remarks to U.S. President Donald Trump, Speaker of the U.S. House of Representatives Mike Johnson (R-LA) and Louisiana Governor Jeff Landry in the Roosevelt Room of the White House in Washington, DC, United States, March 24, 2025.
Carlos Barría | Reuters
“Korea’s commitment to U.S. 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 said in a statement released Monday on X.
Randy Parker, CEO of Hyundai North America, said tariffs are still tough, but above 25%, as the automaker targets a sixth straight year of record U.S. retail sales in 2026.
“Fifteen percent is still 15%,” he told CNBC in a phone interview Tuesday. “Reaching 15% is an important milestone. It’s been quite a journey to get to this agreement, which has been, I would say, quite a long one.”
Hyundai, including its subsidiary Kia which operates separately in the United States, has significantly increased its sales and operations in the United States in recent years. But the automaker continues to import the majority of its vehicles – estimated at nearly a million units this year – from South Korea.
GlobalData estimates that more than 1.37 million vehicles, or about 8.6% of U.S. sales this year, will be vehicles imported from South Korea, making the country the largest exporter of vehicles sold in the United States, after Mexico.
Hyundai is expected to import more than 951,000 vehicles in 2025, according to GlobalData. That includes more than 369,000 for Kia and 582,000 for Hyundai and its Genesis luxury brand.
Hyundai aims to have more than 80% of its U.S. vehicle sales produced locally by 2030, the company announced this year. This compares to around 40% currently.
Despite the tariffs, GM is expected to import nearly 422,000 vehicles from South Korea to the United States this year, according to GlobalData. This would represent a 3.6% increase from record imports of more than 407,000 units last year.
GM is increasingly using South Korean factories to produce popular entry-level crossovers for Chevrolet and Buick. Its U.S. sales of South Korean-produced vehicles — mostly entry-level models — rose from 173,000 in 2019 to more than 407,000 last year, according to GlobalData.
GM, in an emailed statement, said the company “appreciates that negotiators have finalized a trade agreement between the United States and South Korea.”
“GM’s long-standing operations in Korea produce affordable, high-quality crossovers that complement our U.S. vehicles and domestic production, which will soon reach 2 million units. We will monitor and review the details,” GM said.
GM produces its Buick Encore GX and Buick Envista crossovers, as well as the Chevrolet Trailblazer and Chevrolet Trax crossovers, at plants in South Korea. The company touted the vehicles as the pinnacle of the automaker’s profitable growth in low-margin, entry-level vehicles.
Detainees are forced to stand against a bus before being handcuffed, during a raid by federal agents where about 300 South Koreans were among 475 people arrested at the site of a $4.3 billion project by Hyundai Motor and LG Energy Solution to build batteries for electric cars in Ellabell, Georgia, United States, September 4, 2025, in a still image from a video.
United States Immigration and Customs Enforcement | Via Reuters
The new trade agreement between the United States and South Korea comes months after a period of tension between the two countries following an immigration raid on a battery factory jointly owned by Hyundai and LG Energy Solution in Georgia.
About 475 workers, including more than 300 South Koreans, were arrested in the Sept. 4 raid at the Ellabell, Georgia, factory, according to U.S. immigration authorities.