Auto industry rattled by Trump’s tariff hike

Jan 27, 2026, 11:09 am

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Hyundai Motor Group Chairman Chung Eui-sun signs a commemorative message on an Ioniq 5 produced at Hyundai Motor Group Metaplant America (HMGMA). / Courtesy of Hyundai Motor Group

South Korea’s automotive industry has been left reeling after U.S. President Donald Trump announced a renewed hike in automobile tariffs, raising them from 15 percent to 25 percent.

According to government and industry sources on Jan. 27, anxiety is spreading across the auto sector following Trump’s decision to reverse last year’s tariff agreement. In 2025, South Korea and the United States reached a deal to lower tariffs on Korean-made vehicles exported to the U.S. from 25 percent to 15 percent after protracted negotiations involving both the government and industry leaders. The latest move, however, effectively nullifies that agreement and is expected to deal a serious blow to Korean auto exports.

Trump said on Jan. 26 in a post on Truth Social that “the Korean legislature has failed to honor the agreement between Korea and the United States,” adding that he would therefore raise tariffs on automobiles, lumber, pharmaceuticals and “all other reciprocal tariffs” from 15 percent to 25 percent.

He claimed that he and President Lee Jae-myung had reached “a great deal for both countries” on July 30, 2025, and that the terms were reaffirmed during his visit to South Korea on Oct. 29 of that year. “Why has the Korean legislature not approved the agreement?” Trump wrote.

The South Korean government has begun preparing a broad response. In a statement, the presidential spokesperson’s office said a countermeasures meeting involving relevant ministries would be convened later that morning under the policy chief. It also said Trade, Industry and Energy Minister Kim Jung-kwan, who is currently in Canada, plans to visit the United States as soon as possible to discuss the issue with Commerce Secretary Howard Lutnick.

The automotive industry is also weighing its options. With Chung Eui-sun, chairman of Hyundai Motor Group, currently in Canada for a submarine project schedule, attention is focused on whether he will join Minister Kim’s upcoming trip to Washington as part of efforts to mitigate the impact of the tariff hike.

#auto tariffs #Trump administration #Hyundai Motor Group #U.S.–Korea trade