President Donald Trump signs an executive order imposing 25 percent tariffs on all cars that are shipped into the United States during an address from the Oval Office at the White House in Washington, D.C., March 26. UPI-Yonhap
U.S. President Donald Trump said Wednesday his administration will start imposing 25 percent tariffs on all imported cars early next month, a new levy likely to affect Korea's automotive industry.
During a press availability, Trump signed a proclamation to impose the new tariffs on foreign-made cars and light trucks that are set to take effect April 2, as he is using tariffs to strengthen domestic manufacturing and pare down the United States' trade deficit.
The auto tariffs are in addition to duties already in place, an aide to Trump said, noting the new levies will result in over $100 billion of new annual revenue to the U.S.
"What we are going to be doing is a 25 percent tariff on all cars that are not made in the United States," Trump said, calling the tariff a "modest" measure and repeating the claim that countries doing business in the U.S. have "taken so much out of our country, friend and foe."
"If they are made in the U.S., (there is) absolutely no tariff," he added.
Trump also pointed out that his administration is trying to allow people buying a U.S.-made car with a loan to deduct interest payments for income tax purposes.
The imposition of auto tariffs on April 2 is set to coincide with Trump's announcement on reciprocal tariffs meant to match what other countries levy on U.S. exports. The reciprocal duties are to be customized based on trading partners' tariff- and non-tariff barriers, as well as other factors, including exchange rates.
The president said reciprocal tariffs will be imposed on "all countries" rather than focusing on specific countries.
"We are going to make it all countries, and we're going to make it very lenient," he said. "I think people are going to be very surprised. It'll be, in many cases, less than the tariff that they've been charging us for decades."
Korean businesses have been closely watching Trump's tariff announcements as they are trying to minimize the potential impact of planned U.S. levies.
The United States is a top auto export market for Korea. Of Korea's total car exports last year, exports to the U.S. were tallied at $34.7 billion, or 49.1 percent. Hyundai Motor Group and GM Korea exported around 970,000 and 410,000 units to the U.S., respectively, last year.
Jose Munoz, president and CEO, Hyundai Motor Company, speaks during a media tour and grand opening at the Hyundai Motor Group Metaplant America, March 26, in Ellabell, Ga. AP-Yonhap
No U.S. tariffs have been imposed on Korean cars since 2016 under a bilateral free trade agreement.
Amid growing tariff pressure, Hyundai Motor Group on Monday announced its plan to invest $21 billion in the United States through 2028. The plan consists of an investment of $8.6 billion for the automotive sector, $6.1 billion for the steel industry, component parts and logistics, and $6.3 billion for future industry sectors and energy.
The Trump administration is seeking to impose new tariffs as it has received comments from various U.S. industry groups.
Business groups in the U.S. have taken issue with various Korea-related trade issues, including Korea's aged-based beef import restrictions, its online platform regulatory moves and the "screen quota system" mandating local theaters fill part of their screening time with Korean produced flicks. (Yonhap)