US Cuts South Korea Auto Tariff To 15% With South Korea agreeing to investing billions in U.S. industries, US tariffs on South Korean imports, including cars, will now be 15 per cent
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U.S. Commerce Secretary Howard Lutnick said that the general tariff rate on imports from South Korea, including on autos, would drop to 15 per cent retroactive to November 1.
"The Republic of Korea has officially moved to implement their strategic-investment legislation in parliament. This key step ensures U.S. industry and workers will see the full benefit of POTUS's trade deal with Korea. In response, the U.S. will lower certain tariffs under the deal – including auto tariffs to 15 per cent, effective November 1," Howard Lutnick said on social media platform, X.
Korea's commitment to American investment strengthens the economic partnership and domestic jobs and industry. "We are also grateful for the deep trust between our two nations. I look forward to continuing to work closely with Seoul to build an even stronger and more prosperous future for both nations," Lutnick added.
The reduction follows a trade cooperation reached last month between the U.S. and South Korea. This included provisions for adjustments in import duties as part of broader economic agreement.
Hyundai Motor Group (the Group) in August announced a significant increase in investment to $26 billion in the United States, reinforcing its long-term commitment to innovation, jobs creation, and sustainable growth across key industries. This investment will be made between 2025 and 2028, significantly expanding the Group's footprint in the U.S. market. This new commitment represents an additional $5 billion investment on the $21 billion allocation announced in March 2025, dedicated to advancing the Group's strategic initiatives in automotive, steel, and robotics.
According to data published by OEC, in 2024, South Korea exported $68.4 billion of cars, being the second most exported product (out of 1,219) in South Korea. In 2024, the main destinations of South Korea's Cars exports were: United States ($34.7 billion), Canada ($5.26 billion), Australia ($3.2 billion), United Kingdom ($2.33 billion), and Kyrgyzstan ($1.5 billion). In 2024, South Korea's exports of automobiles to the United States stood at $34.7 billion, accounting for 49 per cent of its total auto exports.
The fastest growing markets for cars exports in South Korea between 2023 and 2024 were: United States, Kyrgyzstan , and Canada. In September 2025, South Korea exported cars mostly to the United States at $2.37 billion.
According to a S&P Global report published in the last week of November, the South Korea-US trade agreement has the most impact on the automotive industry, primarily by lowering the Section 232 tariff on autos and auto parts from 25 per cent to 15 per cent, while also setting a 15 per cent reciprocal tariff rate. "Despite this reduction, the rates remain significantly higher than the free trade conditions South Korea enjoyed prior to the Trump administration," the report quoted.
For automakers, the South Korea agreement provides relief for General Motors, the Hyundai Motor Group and Polestar, which plans to produce the Polestar 4 for US sale in South Korea beginning in 2026. South Korea, also included commitments to invest in the US.
"We are also removing tariffs on airplane parts and will "un-stack" Korea's reciprocal rate to match Japan and the EU," Lutnick added on X.
Low import costs will benefit South Korean automakers as reduced tariffs, lowers costs and improves price competitiveness. This allows for better pricing strategies for vehicles in the US market, which is South Korea's second largest export market, and can lead to significant savings for companies like Hyundai and Kia. A reduced tariff also puts them on a more even playing field with competitors from other countries.
