Hyundai Motor's president is pushing South Korea to quickly approve a $350 billion U.S. investment deal, warning that tariff pressures could intensify even after the Supreme Court struck down universal tariffs. The automaker says it and Kia already lost nearly $5 billion last year due to trade tensions.
The head of Hyundai Motor is sounding the alarm about potential escalating trade tensions between the United States and South Korea, despite recent legal developments that appeared to favor international companies.
During a Tuesday meeting with South Korean opposition legislators and business leaders, Hyundai Motor President Sung Kim pressed for rapid approval of legislation enabling a massive $350 billion U.S. investment deal. The package represents part of a trade agreement reached between the two nations last year that would reduce tariffs from 25% to 15%.
Kim’s concerns center on the possibility that the Trump administration may pivot toward targeting specific industries like automotive manufacturing, even after suffering a setback when the Supreme Court overturned universal tariff measures.
President Trump has issued warnings about imposing higher tariffs on nations that he claims are not honoring their existing trade commitments with America.
“I think that with the reciprocal tariffs now nullified, there may be increased pressure to raise sector-specific tariffs,” Kim explained to the assembled lawmakers.
The Hyundai executive painted a stark picture of potential consequences, stating: “Should the 25% tariffs be materialised, the competitiveness of Korean companies will inevitably weaken, at a time when the entire industry is undergoing upheaval, including the ongoing transition to electric vehicles and the acceleration of competition for autonomous driving.”
South Korea had already been working urgently to enact the necessary legislation before the Supreme Court decision, responding to Trump’s threats to increase automotive, pharmaceutical, and other product tariffs to 25% from 15%. The administration accused Seoul of failing to implement the trade agreement negotiated last year.
Both Hyundai and its corporate affiliate Kia have been actively advocating for tariff policies that would create fair competition with their Japanese and European competitors in the crucial American market.
According to Kim, the automotive sector has faced what he described as a “major crisis” stemming from U.S. tariffs implemented last year. He expressed expectations that industry-specific tariffs, particularly affecting steel and automotive products, would likely continue.
The financial impact has been substantial for the Korean automakers. Kim revealed that Hyundai and Kia together absorbed a devastating 7.2 trillion won ($4.98 billion) loss from U.S. tariffs in the previous year. He warned this figure could grow if tariffs return to the 25% level.
Following the Supreme Court’s ruling on Friday, Trump quickly responded by implementing a new 15% universal import duty and launching fresh investigations that have reignited concerns about tariffs affecting automobiles, semiconductors, and other key sectors.
Lawmaker Park Soo-young, speaking to media after the meeting, reported that Kim suggested the court’s decision might actually accelerate Trump’s tariff initiatives rather than slow them down.
The Korean government announced Monday that it remains committed to the trade agreement established last year, despite the ongoing tensions and uncertainty surrounding tariff policies.