Billions of dollars, half a million jobs in U.S.: Hyundai CEO makes appeal over tariff threat

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Billions of dollars, half a million jobs in U.S.: Hyundai CEO makes appeal over tariff threat

Published: 17 Feb. 2025, 17:54 Updated: 17 Feb. 2025, 18:40

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Hyundai Motor CEO José Muñoz speaks with the Korean press at the LA Auto Show in California on Nov. 21, 2024. [HYUNDAI MOTOR]

As U.S. President Donald Trump formalized tariffs on auto imports, Hyundai Motor is scrambling to appeal to the U.S. government, accentuating the gigantic investments in the country and the significant job creation it stimulated.

"Hyundai Motor Group has invested $20.5 billion in America, creates and supports 570,000 American jobs nationwide across industries," Hyundai Motor CEO José Muñoz said on his social media on Feb. 15, adding that it has established a network of "845 Hyundai dealers, 788 KIA dealers and 229 Genesis dealers."

"Through our growing U.S. manufacturing footprint, Hyundai produced more than 700,000 vehicles in America last year. We take pride in our commitment to U.S. manufacturing, with design, engineering and assembly occurring in America to support the U.S. economy."

The imploring plea came just a few days after Muñoz publicly touted Hyundai's role in the U.S. market through his social media, highlighting that it has "more than 64 establishments in America" and has been "an integral part of American communities for nearly four decades, supporting Americans across all 50 states."

Trump has declared that he plans to announce tariffs on foreign cars on April 2, with the rate to be set considering all nontariff barriers, which include any measure besides a customs tariff that restricts international trade, such as the country's own EV subsidy plan.

Currently, Korea exports domestically produced cars to the United States tariff-free under the two countries' FTA. With Trump's warning about reviewing nontariff barriers, however, Korea isn't out of the woods yet.

Korea is the second-largest auto importer to the United States, reaching 1.37 million in 2024, to come in after Mexico, while beating Japan's 1.31 million.

Hyundai exported a total of 2.18 million vehicles last year, and of them, 45.7 percent went to the United States.

U.S. President Donald Trump speaks to reporters after landing at Palm Beach International Airport in West Palm Beach, Florida on Feb. 16. [AP/YONHAP]

The situation is more serious in the case of export-reliant GM Korea, with around 88.5 percent of its exports shipped to the U.S. market last year.

S&P Global, a credit-rating agency, estimated that if Trump imposes 20 percent tariffs on Korean automobiles, Hyundai and Kia's operating profit will be slashed by 19 percent.

In the scenario of a 10 percent tariff, Hyundai will suffer a 1.9 trillion won ($1.3 billion) cut in profit, while Kia is facing the prospect of losing 2.4 trillion won, according to a report by KB Securities.

"Automobiles are one of the biggest exports, and as it is based on the manufacturing value chain, a setback is inevitable," said researcher Kim Gwi-yeon from Daishin Securities. "The scale of the influence is assumed to be up to 14 percent of Korea's exports, calculated to be a loss of some 6 trillion won."

Hyundai Motor has recently scaled up its Washington office and is rushing to boost ties with figures who possess a Washington background. The office is vice headed by Robert Hood, a former U.S. assistant secretary of defense for legislative affairs in the first Trump administration.

Hyundai and Kia's U.S. production capacity will be ramped up to 1.2 million once the automaker group's Georgia plant commences full operation, equivalent to 70 percent of the 1.7 million vehicles sold by the two companies in the United States in 2024.

BY SARAH CHEA [[email protected]]