U.S. and South Korea Agree on 15% Auto Tariffs

Just days before the August 1 deadline, the U.S. and South Korea finalize a deal setting auto import tariffs at 15 percent

The United States and South Korea have reached a new trade deal that sets a 15% auto tariffs on imported cars. This particular agreement, announced by President Donald Trump on social media, comes just after similar trade deals were finalized with the European Union and Japan.

Until now, Korean car imports were facing the threat of a 25% tariff. Without any doubt, this would’ve been a considerable hit to automobile companies like Hyundai, Kia, and Genesis. But with this new deal of 15% auto tariffs, that big threat is off the table, at least for the time being. Instead, these vehicles will face a 15% import tax. It is the same as vehicles coming from Europe and Japan.

The new rate also covers auto parts and impacts some popular Korean-made U.S. models such as Chevrolet’s Trax and Trailblazer. Polestar, the electric car brand, has also confirmed that the company will embark on shipping the Polestar 4 from South Korea to the U.S. later this year. So, the new tariff applies there too.

However, this US-South Korea deal isn’t merely about cars. South Korea has pledged a $350 billion investment in the American economy. Nearly $150 billion of that will assist Korean companies in entering the U.S. shipbuilding industry. The remaining investment will go into tech, semiconductors, and clean energy.

In addition to this, South Korea will purchase $100 billion worth of U.S. liquefied natural gas. However, tariffs on steel, copper, and aluminum will be the same for now.

Trump also hinted that South Korea will accept more American products, and they include cars and trucks as well as agricultural goods. However, details about this are still a bit unclear. It is being expected that South Korean President Lee Jae Myung will visit the White House soon in order to finalize the rest of the deal.