Korean auto exports set record despite U.S. tariffs

Through October, South Korea’s cumulative automobile exports topped $59.6 billion, marking a record high. Shipments to the United States, the country’s largest export market, fell about 16 percent due to steep tariffs, but increases in the European Union, other European countries, and Asia offset the decline.

According to the Ministry of Trade, Industry and Energy’s “Automotive Industry Trends for October,” released Nov. 20, automobile exports from January through October totaled $59.628 billion. The figure represents a 0.9 percent increase from the same period last year, when exports reached $59.1 billion, setting a new record. Exports of eco-friendly vehicles rose 8.1 percent to $21.228 billion, leading the overall growth.

The performance came despite a sharp drop in exports to the United States, South Korea’s largest auto market, due to U.S. tariffs. As of October, exports to the United States totaled $24.793 billion, down 15.9 percent from a year earlier.

The Trump administration began imposing a 25 percent tariff on all imported vehicles in April. South Korea’s auto exports started to decline in March, falling 10.8 percent from a year earlier to $2.78 billion. The downward trend continued for eight consecutive months through October, when exports dropped to $2.124 billion, a 29 percent decrease from a year earlier.

Increases in exports to other regions offset the U.S. losses. From January through October, exports to the European Union reached 7.996 billion dollars, up 21.7 percent from a year earlier. Other European markets saw exports rise 32.2 percent to 5.371 billion dollars, and Asia recorded a 39.1 percent increase to 6.649 billion dollars.

Auto export performance is expected to improve further. Following tariff negotiations that the European Union and Japan concluded with the United States in August and September, both regions began benefiting from a reduced 15 percent auto tariff. South Korea is also set to receive the same reduction.

South Korea and the United States recently released a fact sheet outlining their tariff agreement, confirming that the tariff on Korean-made vehicles will be reduced from 25 percent to 15 percent. The lower rate will be applied retroactively to the first day of the month in which South Korea submits a special law to the National Assembly to implement its 350 billion dollar investment pledge in the United States. The government plans to submit the law within this month.


세종=정순구기자 soon9@donga.com