US Cuts South Korea Auto Tariffs to 15%, Shares Slip Amid Trade Shift

U.S. President Donald Trump announced a new trade deal with South Korea that reduces auto tariffs from 25% to 15%, but removes the previous 2.5% tariff advantage that South Korean automakers had over Japanese rivals. Despite the tariff cut being seen as a positive step toward leveling the playing field with Japan and the EU, shares of South Korean automakers Hyundai Motor and Kia Corp fell significantly following the announcement, reflecting concerns about tighter profit margins. South Korea's auto association described the deal as fortunate, emphasizing the removal of uncertainty and the creation of a fair competitive environment. Hyundai Motor reaffirmed its commitment to the U.S. market, highlighting a recent $21 billion investment in American manufacturing facilities. The announcement also marked an early test for South Korean President Lee Jae Myung, who welcomed the deal's clarity. Overall, the tariff adjustment weighed on the Korean stock market’s auto sector, offsetting gains in other industries and keeping the KOSPI index flat.