Driving the news: President Trump announced he's raising tariffs on South Korean auto imports to 25%, up from 15%, after accusing Seoul of failing to quickly enact a trade deal the two countries struck last year.
The details: In a post to Truth Social, Trump wrote that South Korea's parliament is “not living up to its Deal” while the U.S. has “acted swiftly to reduce our TARIFFS in line with the Transaction.” The tariff hike applies to autos, auto parts, lumber, pharmaceuticals, and other products.
For context: Trump and South Korean President Lee Jae Myung reached the original deal in July 2025, with Trump reaffirming the terms during an October visit to Korea.
Worth noting: Analysts are skeptical the threatened tariff increase will actually go into effect as a South Korean delegation is heading to Washington this week. Trump has previously used tariff threats as negotiating leverage before walking them back (see: Greenland).
Looking ahead: If the new tariff rate actually takes effect, expect Hyundai and Kia to absorb some (but not all) of the cost to stay competitive. Dealers may also see inventory shift as buyers look for alternatives before prices likely jump.
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