Tariff Reductions Deliver Significant Tailwind To Hyundai And GM

Hyundai Motor and General Motors are set to be among the primary beneficiaries of the U.S. decision to lower import tariffs on vehicles and other goods from South Korea.

Hyundai remains the largest importer of new South Korean‑made vehicles into the United States, with GM the next largest. Both automakers incurred substantial tariff costs this year after President Donald Trump imposed 25% duties on vehicles imported from South Korea and other countries in the spring.

Last week, the administration confirmed it will reduce tariffs on certain products from South Korea, including vehicles, to 15% from 25%. The implementation notice was published on Wednesday in the Federal Register. Similar tariff reductions have been negotiated with other countries, including Japan and the United Kingdom.

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 prior quarter. GM has said tariff impacts, primarily from South Korea and Mexico, were expected to total $3.5 billion to $4.5 billion in 2025.

GM Chief Financial Officer Paul Jacobson told attendees at a UBS conference that the company initially estimated a $2 billion hit from tariffs on South Korean imports but has offset much of that expense. He now expects the 2026 impact to be closer to $1 billion or less. “We do think that is going to be a tailwind next year, just not as much as the whole 50% because the ultimate tariff bill that we’re going to pay this year for Korea was going to be a lot lower than the $2 billion from the stuff that we’ve been working on,” Jacobson said.

The tariff announcement follows South Korea’s introduction of legislation to fulfill a pledge to invest $350 billion in the United States over several years. U.S. Commerce Secretary Howard Lutnick said on X that Korea’s investment commitment strengthens economic ties, domestic jobs and industry, and reflects deep trust between the two nations.

Randy Parker, CEO of Hyundai North America, acknowledged the tariffs remain a challenge but said a 15% rate is preferable to 25% as Hyundai pursues a sixth consecutive year of record U.S. retail sales in 2026. “Fifteen percent is still 15%,” he told CNBC. “Getting to 15% is a great milestone. It’s been quite the journey reaching this agreement, which has been, I would say, quite extensive.”

Despite expanding U.S. sales and operations, Hyundai—including Kia, which operates separately in the U.S.—continues to import the majority of its vehicles from South Korea, with nearly 1 million units expected this year. GlobalData estimates that more than 1.37 million vehicles—about 8.6% of U.S. sales—will be imported from South Korea in 2025, making South Korea the largest exporter of vehicles to the U.S. after Mexico.

GlobalData projects Hyundai will import more than 951,000 vehicles in 2025, including roughly 369,000 for Kia and 582,000 for Hyundai and its Genesis luxury brand. Hyundai has set a target to produce more than 80% of its U.S. vehicle sales domestically by 2030, up from about 40% today.

GM is estimated to import nearly 422,000 vehicles from South Korea this year, a 3.6% increase from last year’s record imports of more than 407,000 units, according to GlobalData. The company has increasingly used South Korean plants to manufacture entry‑level crossovers for Chevrolet and Buick. U.S. sales of South Korean‑produced vehicles—mainly entry‑level models—rose from 173,000 in 2019 to over 407,000 last year.

In a statement, GM said it “appreciates that negotiators have finalized an agreement on trade between the US and South Korea.” The company noted its Korea operations produce affordable crossovers that complement U.S. vehicles and domestic production, which it said will soon reach 2 million units, and added it will review the agreement’s details.

GM manufactures the Buick Encore GX and Buick Envista crossovers, along with the Chevrolet Trailblazer and Chevrolet Trax, at South Korean plants and has cited these models as contributors to profitable growth in lower‑margin, entry‑level segments.

The trade agreement comes months after heightened tensions following an immigration raid at a Georgia battery plant jointly owned by Hyundai and LG Energy Solution. U.S. immigration officials said about 475 workers, including more than 300 South Korean nationals, were arrested in the Sept. 4 raid at the Ellabell, Georgia, facility.