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Hyundai could be hit with $5.9B in annual U.S. tariffs

Published: 15 Oct. 2025, 16:31 Updated: 15 Oct. 2025, 17:40

Completed Hyundai vehicles await shipment at the export pier near the company’s Ulsan plant on July 31. [YONHAP]

Hyundai Motor Group could be hit with 8.4 trillion won ($5.9 billion) in annual U.S. tariffs — the heaviest burden of any global automaker — if Washington keeps its current 25 percent rate on Korean car exports, according to an analysis released on Wednesday.

NICE Investors Service estimated that if a 25 percent tariff is applied only to Korean vehicles while Japan and the European Union (EU) face a lower rate of 15 percent, Hyundai Motor Group’s annual tariff costs will reach 8.4 trillion won, surpassing Toyota’s 6.2 trillion won, GM’s 7 trillion won and Volkswagen’s 4.6 trillion won.

“Once labor costs from expanded U.S. production and rising parts prices are factored in, Hyundai Motor Group’s total tariff burden could reach as high as 10 trillion won,” said Lee Ho-geun, an automotive engineering professor at Daedeok University.

As a result, the group’s operating profit margin could fall from 9.7 percent to 6.3 percent, a decline of 3.4 percentage points — the steepest drop among its global peers. Toyota’s margin is projected to decline by 1.6 percentage points, GM’s by 3 points and Volkswagen’s by 1.2 points.

At the same time, the report suggested that profitability could quickly recover if tariffs were reduced. Should Korea secure the same 15 percent tariff rate as Japan and the EU, Hyundai's annual tariff burden would fall to 5.3 trillion won, raising its operating margin to 7.5 percent.

The report noted that GM is also burdened by high tariffs because its Korean unit, GM Korea, serves as a key export hub for the U.S. market. Last year, GM Korea exported about 420,000 vehicles to the United States. GM’s overall operating margin could fall from 8 percent to 5 percent as a result.

“Hyundai Motor Group’s strong profitability and financial flexibility may allow it to absorb some of the tariff burden,” the report said. “However, if major competitors take advantage of lower tariff rates to cut prices, Hyundai and Kia could face a competitive disadvantage in the U.S. market.”

Hyundai Motor and Kia are scheduled to announce their third-quarter earnings later this month. Analysts estimate the two companies paid about 2.73 trillion won in tariffs during the third quarter alone — roughly 1.5 trillion won for Hyundai and 1.23 trillion won for Kia, according to Hanwha Investment & Securities.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YOUNG-WOO [[email protected]]