When Will the 15% Auto Tariff Be Lowered? Hyundai Motor and Kia Anxious Over Japan's Reduction

Trump Signs Executive Order to Lower Tariffs on Japanese Cars
Japan to Receive 15% Tariff Reduction Ahead of Korea
Delayed Tariff Cuts Mean Mounting Losses for Hyundai Motor and Kia
"Time for Diplomatic Action to Compete with Japan"

The Korean automotive industry is growing increasingly anxious as it watches the United States officially implement a 15% tariff on Japanese finished vehicles. Despite a month having passed since the Korea-US agreement, tariffs on Korean vehicles have yet to be reduced, raising concerns that Korean cars will inevitably be at a disadvantage in the US market.

According to the financial investment industry on September 5, if the US delays its tariff reduction measures on Korean finished vehicles, Hyundai Motor and Kia are estimated to bear a tariff burden of several hundred billion won every month.

According to an analysis by Samsung Securities, if tariffs on finished vehicles and parts exported to the US are lowered from 25% to 15%, Hyundai Motor's annual tariff burden would decrease from 4.9 trillion won to 2.3 trillion won, and Kia's from 4 trillion won to 2.3 trillion won. A simple calculation shows that for every month the reduction for Korea is delayed, Hyundai Motor and Kia lose over 300 billion won in tariffs.

Despite these circumstances, Hyundai Motor and Kia set a new record for the highest monthly sales in August, continuing their strong performance. The problem is that if tariff measures are delayed and cost pressures increase, it will be difficult to maintain this growth trend. Furthermore, the recent sales growth rate of Toyota, a direct competitor in the US, is rising faster than that of Hyundai Motor and Kia, which adds to the pressure.

In August 2025, Hyundai Motor and Kia (including Genesis) sold 179,455 units in the US, a 10.9% increase compared to the same month last year. During the same period, Toyota (including Lexus) sold 225,367 units, up 13.6%.

An industry official stated, "Hyundai Motor and Kia have recently achieved strong results in the US through aggressive promotions, but if the tariff reduction is delayed, they will inevitably be at a disadvantage in competition with Japanese cars. Active diplomatic efforts at the government level are urgently needed."

On September 4 (local time), US President Donald Trump signed an executive order to officially implement the trade agreement with Japan. As a result, Japan will receive the 15% mutual tariff reduction ahead of Korea.

Previously, the US and Japan had differing interpretations regarding the scope of the tariff reduction. While both countries agreed to lower mutual tariffs from 25% to 15%, the key issue was whether to include the existing tariffs in the calculation. If the existing tariffs were included, there was a possibility that Korea, which had a free trade agreement (FTA) with the US and enjoyed zero tariffs, could have a 2.5 percentage point advantage over Japan.

However, the US ultimately accepted the Japanese position, allowing Japanese finished vehicles to benefit from the lower 15% tariff ahead of Korea. At the same time, Korea's 2.5 percentage point tariff advantage over Japanese cars in the US has disappeared. Japan will receive the 15% tariff reduction as early as next week. In contrast, Korea still does not have a set timeline for the reduction, and uncertainty continues.

This content was produced with the assistance of AI translation services.