South Korea’s Auto Exports to U.S. Plunge amid Tariffs

South Korea’s auto exports to the United States fell the most among major global car-exporting countries in the second quarter, after U.S. tariffs were fully implemented. Exports declined by about $3 billion from the same period last year. The automotive industry warns the situation could worsen in the third quarter as U.S. inventories dwindle.

An analysis of U.N. trade data by the Dong-A Ilbo on Sept. 10 shows that the U.S. imported $7.576 billion worth of South Korean cars in the second quarter, down $2.976 billion, or 28.2 percent, from the same period last year. The decline was larger than that of other competitors, including Germany ($2.125 billion), Canada ($1.371 billion), and Japan ($174 million).

The sharp drop in South Korean car exports to the U.S. is largely attributed to Hyundai’s strategy of maximizing local inventory to avoid tariffs. However, this approach cannot continue in the second half of the year, raising concerns that export losses could worsen due to reduced price competitiveness.

“The 25 percent auto tariff has directly hit South Korea’s exports," said Kim Soo-dong, head of the Global Competitive Strategy Division at the Korea Institute for Industrial Economics and Trade. "Companies will inevitably need to increase local production, and the volume exported from South Korea is expected to continue declining for the time being.”


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