Hyundai Motor, Kia stocks tank on eve of Trump tariff rollout
Published: 02 Apr. 2025, 14:00
Updated: 02 Apr. 2025, 19:36
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- PARK EUN-JEE
- [email protected]
![U.S. President Donald Trump speaks at a reception celebrating Women's History Month in the East Room of the White House, on March 26 in Washington. [AP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/02/01a1418f-c3f6-46d2-bf99-717049d9fd06.jpg)
U.S. President Donald Trump speaks at a reception celebrating Women's History Month in the East Room of the White House, on March 26 in Washington. [AP/YONHAP]
Investor sentiment for Korea's car and battery companies tanked on Wednesday on the eve of the planned imposition of new tariffs by the Donald Trump administration.
Automobiles, the mainstay export item for the country, are vulnerable to both the predetermined 25 percent auto tariff and other potential reciprocal levies. The Trump administration is set to announce what the president calls reciprocal tariffs at a White House event at 4 p.m. on Wednesday in Washington, said to match what other countries levy on U.S. exports.
Hyundai Motor lost 1.16 percent to close at 196,300 won ($134), continuing the recent downward trajectory. Shares of Korea's largest automaker have shed a combined 12.77 percent since Thursday, when Trump inked an executive order imposing a 25 percent tariff on all auto imports that is set to take effect on Wednesday in Washington. The order will bring a 25 percent levy on automotive components into effect “no later than May 3.”
Shares of Kia, a sister company of Hyundai, are mirroring the losing streak, having plunged 1.18 percent following the consecutive losses between March 27 and 31. Samsung SDI, an EV battery maker, also tumbled 3.67 percent on Wednesday while SK Innovation, the parent company of battery maker SK On, is down 3.54 percent.
Trump has dubbed Wednesday “Liberation Day” — a culmination of his drive to reduce America's trade deficits and boost domestic manufacturing. They will take effect “immediately,” the White House said.
The upcoming tariffs would mean the expansion of Trump's trade war on a global scale, given that the tariff fight has so far affected some countries, including China, Canada and Mexico, as well as several product targets, such as steel and aluminum.
In the lead-up to the long-awaited announcement, media speculation swirled that the Trump administration had been weighing several options, including a 20 percent blanket tariff on all imports — one that White House press secretary Karoline Leavitt did not confirm Tuesday.
Korea has been anxiously awaiting the tariff announcement, as it could become a target for Trump's tariff pressure given that the U.S. goods trade deficit with Korea was tallied at $66 billion last year — a nearly 30 percent rise from the previous year, according to the Office of the U.S. Trade Representative (USTR).
The Asian ally's concerns further deepened amid a sense that it could be part of the “Dirty 15" group — a term that Treasury Secretary Scott Bessent used to refer to the 15 percent of trading partners that comprise a large part of America's trade volume while having high trade barriers on U.S. exports.
Reciprocal tariffs have originated from Trump's deep-seated perception that the United States has been “ripped off” by many countries, “both friend and foe alike,” as well as his desire to reshape the global trading system in favor of American interests.
“We've been ripped off by every country in the world, friend and foe. We've been ripped off on trade. We've been ripped off on military,” he said during a press availability on March 21.
“We protect people, and they don't do anything for us. It's just so unfair for years and years. Now some of that money is going to be coming back to us in the form of tariffs,” he added.
The new tariffs are to be put into place after Trump signed a presidential memorandum on the “fair” and “reciprocal” plan on Feb. 13, tasking Commerce Secretary Howard Lutnick and USTR Jamieson Greer to submit a report with proposed trade remedies on a country-by-country basis.
When the memo was signed, his aides said that reciprocal tariffs will be customized based on trading partners' tariff- and nontariff barriers as well as other factors, such as countries' exchange rate-related policies and practices.
![This captured image shows the front cover of the U.S. Trade Representative's 2025 National Trade Estimate Report on foreign trade barriers. [SCREEN CAPTURE/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/02/1198e22e-6642-4238-b5f9-557143570bb8.jpg)
This captured image shows the front cover of the U.S. Trade Representative's 2025 National Trade Estimate Report on foreign trade barriers. [SCREEN CAPTURE/YONHAP]
Just two days before the reciprocal tariff rollout, USTR released an annual report on foreign trade barriers that listed Korea's “offset” defense trade policy, emission-related regulations on imported cars, pricing policies for pharmaceuticals and age-based restrictions on U.S. beef imports, to name a few.
For the first time, the report mentioned Korea's defense offset trade program under which Seoul has set certain conditions for foreign defense contractors to meet for defense industrial cooperation when they engage in government procurement projects.
The tariff drive comes as the Trump administration seeks to reset the “baseline” of global trade in America's favor based on its belief that the current state of global trade is “unfair” to the U.S.
“Countries that want to [negotiate] can negotiate with us on a one-on-one bilateral basis to see if we can come up with trade deals with them that are fair to both sides,” he said during a Fox News Radio interview last month. “But we have to negotiate from a new status quo. We can't negotiate from the existing status quo, which is completely [unfair].”
In addition to the reciprocal tariffs, the Trump administration plans to start collecting 25 percent tariffs on imported cars and auto parts on Thursday — another levy bound to affect the Korean industry. The Trump administration has already begun imposing 25 percent tariffs on steel and aluminum imports since last month.
![Hyundai Motor Group Executive Chair Euisun Chung delivers remarks as President Donald Trump, second right, House Speaker Mike Johnson, R-La., left, and Louisiana Gov. Jeff Landry stand in the Roosevelt Room at the White House in Washington, Monday, March 24. [AP]](https://koreajoongangdaily.joins.com/data/photo/2025/04/02/59c4a123-72da-450f-8f8a-e1e7f62ff1ea.jpg)
Hyundai Motor Group Executive Chair Euisun Chung delivers remarks as President Donald Trump, second right, House Speaker Mike Johnson, R-La., left, and Louisiana Gov. Jeff Landry stand in the Roosevelt Room at the White House in Washington, Monday, March 24. [AP]
Seoul has been cranking up diplomatic efforts to mitigate the impact from new U.S. tariffs amid concerns that a period of political uncertainty, caused by President Yoon Suk Yeol's short-lived martial law imposition and his subsequent impeachment in December, would affect policy coordination between Seoul and Washington.
Finance Minister Choi Sang-mok warned of financial volatility in the wake of the series of levies on Wednesday during a meeting with the heads and economists of local and foreign financial institutions.
“The U.S. reciprocal tariffs announcement may temporarily increase volatility in global financial markets,” Choi said. “We are preparing to communicate with the U.S. on trade and foreign exchange issues and swiftly formulate measures to respond to reciprocal tariffs.”
Choi also called on the participants to focus on 'inbound' businesses to attract foreign capital, which can serve as a buffer against weak currency and market loss.
European Union and China have both threatened countermeasures against the U.S. move while countries like Japan, India and Australia have struck a more cautious note, saying they will likely come up with measures after the actual imposition.
Update, April 2: Added details about the share prices of automakers and related companies.
BY PARK EUN-JEE, YONHAP [[email protected]]
with the Korea JoongAng Daily
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