U.S. President Donald Trump announced that tariffs will be imposed on imported automobiles starting early next month, causing automotive-related stocks such as Hyundai Motor and Kia to show weakness in the domestic stock market on the morning of the 27th.
As of 10:50 a.m. that day, Hyundai Motor was trading at 212,500 KRW per share, down 4.28% from the previous close. This comes after Hyundai Motor Group Chairman Chung Euisun announced a $21 billion investment in the U.S. at the White House, which had driven a rally for several days but has now partially reversed.
On the same day, Kia also recorded 97,900 KRW, down 3.45% from the previous close due to the impact of the auto tariffs. Related stocks expected to be affected by the tariffs, such as Nexen Tire (-0.89%), Hanon Systems (-1.75%), and Kumho Tire (-1.80%), are also currently showing a downward trend.
This is interpreted as the aftermath of President Trump formalizing the plan on the afternoon of the 26th (local time) to impose a 25% tariff on all imported automobiles and key components. According to the U.S. Department of Commerce, based on last year, U.S. automobile (passenger cars and light trucks) imports accounted for about 8 million units, roughly half of total sales. By country, exports to the U.S. ranked second with South Korea (1.54 million units) following Mexico (2.96 million units).
Moon Yong-kwon, a researcher at Shin Young Securities, said, "Hyundai Motor and Kia will respond by expanding production in the U.S.," but expressed concern, "If, as announced, all imported cars, including Korean-made automobiles, are subject to tariffs, significant damage to domestic automobile exports and production will be inevitable."
Kim Chang-ho, a researcher at Korea Investment & Securities, also pointed out, "Although President Trump mentioned that Hyundai Motor would be exempt from tariffs due to the $21 billion investment, this only applies to vehicles made with U.S.-sourced raw materials and produced in the U.S.," adding, "Hyundai vehicles produced in Korea and sold in the U.S. are still subject to tariffs."
He identified the companies whose profitability would decline the most under the worst-case scenario (15% tariff on Korean products, 25% tariff on Mexican products) as Nexen Tire, Hanon Systems, Kumho Tire, Hyundai Wia, Hyundai Motor, Kia, Hankook Tire, HL Mando, and Hyundai Mobis, in that order. The tariffs are scheduled to take effect on April 2. President Trump has also announced reciprocal tariffs starting April 2.
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