The American flag flies outside a Hyundai car dealership in Irvine, California, USA on March 27, 2025.
Mike Blake | Reuters
Detroit — Hyundai Motor and general motors The two companies are set to be the biggest beneficiaries of lower U.S. tariffs on imported goods, including cars from South Korea.
The South Korean-based automaker is the United States’ largest importer of new cars from that country, followed by GM. Both automakers have paid billions of dollars in tariffs so far this year after President Donald Trump imposed a 25% tariff on cars imported from South Korea and other countries in the spring.
The Trump administration last week confirmed plans to reduce tariffs from South Korea on certain products, including cars, to 15%. A notice regarding the implementation of the trade agreement was published in the Federal Register on Wednesday. Other countries, including Japan and the United Kingdom, are also negotiating tariff reductions with the Trump administration.
Prior to the cuts, Hyundai reported that U.S. tariffs cost the company 1.8 trillion won ($1.2 billion) in the third quarter, up from 828 billion won ($565 million) in the previous quarter. GM recently said the impact of tariffs, primarily from South Korea and Mexico, is expected to be $3.5 billion to $4.5 billion in 2025.
GM Chief Financial Officer Paul Jacobson said Wednesday that the company initially expected tariffs on South Korean imports to cost $2 billion, but the company was able to offset much of that cost. He said GM expects the cost of the levy to be close to or less than $1 billion in 2026.
“We think there will be a tailwind next year, but not as much as the full 50%, because the final tariffs we’ll pay South Korea this year will be much lower than the $2 billion we’ve been working towards,” Jacobson told a UBS briefing.
The US tariff announcement came after South Korea formally submitted a bill to Congress aimed at fulfilling its promise to invest $350 billion in the US over several years.
Hyundai Motor Group Executive Chairman Eisun Chung greets U.S. President Donald Trump, House Speaker Mike Johnson (R-Louisiana), and Louisiana Governor Jeff Landry in the Roosevelt Room of the White House in Washington, DC, on March 24, 2025.
Carlos Barria | Reuters
“South Korea’s commitment to U.S. investment strengthens our economic partnership, domestic jobs and industry, and we also appreciate the deep trust between our two countries,” U.S. Secretary of Commerce Howard Lutnick said in a statement published Monday in X.
Randy Parker, CEO of Hyundai North America, said the tariffs are still tough but better than 25% as the automaker aims to set a record sixth consecutive year of U.S. retail sales in 2026.
“15% is still 15%,” he told CNBC in a phone interview Tuesday. “Reaching 15% is a great milestone. We have a long way to go to reach this agreement, and I would say it’s pretty far-reaching.”
Hyundai has significantly expanded its sales and operations in the United States in recent years, including its Kia subsidiary, which operates separately in the United States. However, the company continues to import the majority of its vehicles (estimated to be close to 1 million this year) from South Korea.
GlobalData estimates that more than 1.37 million vehicles, or about 8.6% of U.S. sales, will be imported from South Korea this year, making South Korea the largest exporter of U.S. sales outside of Mexico.
According to GlobalData, Hyundai is expected to import more than 951,000 cars in 2025. This includes more than 369,000 Kia vehicles and more than 582,000 vehicles from Hyundai and its luxury Genesis brand.
Hyundai announced earlier this year that it aims to locally produce more than 80% of its U.S. vehicle sales by 2030. This compares to about 40% today.
Despite the tariffs, GM is estimated to import about 422,000 vehicles from South Korea to the United States this year, according to GlobalData. This is an increase of 3.6% compared to last year’s record imports of more than 407,000 vehicles.
GM is increasingly using its South Korean plants to produce popular entry-level crossover vehicles for Chevrolet and Buick. According to GlobalData, U.S. sales of the company’s Korean-made vehicles (mainly entry-level models) rose from 173,000 in 2019 to more than 407,000 last year.
“We are grateful that our negotiators have finalized a trade agreement between the United States and South Korea,” GM said in an emailed statement.
“GM’s long-standing Korean operation produces high-quality, affordable crossover vehicles that complement U.S. vehicles and domestic production, and will soon grow to 2 million units. We will monitor and review the details,” GM said in a statement.
GM produces the Buick Encore GX and Buick Envista crossovers, as well as the Chevrolet Trailblazer and Chevrolet Trax crossovers at its South Korean plant. The company has touted these vehicles as the pinnacle of profitable growth for the low-margin, entry-level automaker.
Detainees are forced to stand in front of a bus before being handcuffed during a raid by federal agents that included about 300 South Koreans among the 475 people arrested at the site of a $4.3 billion electric vehicle battery manufacturing project by Hyundai Motor and LG Energy Solutions in Elabelle, Georgia, on September 4, 2025. Still image taken from video.
Our Immigration and Customs ENF | via Reuters
The new U.S.-Korea trade deal comes after months of tension between the two countries following an immigration raid on a battery factory jointly owned by Hyundai Motor and LG Energy Solutions in Georgia.
About 475 workers, including more than 300 Koreans, were arrested in a Sept. 4 raid at a factory in Elabelle, Georgia, according to U.S. immigration authorities.
