Shares in major South Korean automakers declined on Tuesday, triggered by a U.S. move to raise tariffs on products from South Korea. The decision from President Donald Trump prompted a broad sell-off in the sector and weighed on the Korean equity market.
Hyundai Motor and Kia experienced steep share price declines, with Hyundai falling up to 4% and Kia losing as much as 5% during the early trading. However, stocks are paring some loss with Hyundai dropping 1.7% and Kia falling 3.09% after Kospi Index bounced back from a 0.4% decline earlier to now gaining 0.83%.
President Trump stated late Monday that tariffs on South Korean exports to the United States will climb from 15% to 25%. The White House attributed the policy change to what it called the Korean parliament’s lack of action on a trade agreement concluded last year between the two countries.
The new tariffs cover automobiles, lumber, pharmaceuticals, and other goods subject to reciprocal duties. According to Trump’s statement on his Truth Social account, the July 30, 2025, trade deal between the U.S. and South Korea remains unratified by Korean lawmakers, despite terms being reconfirmed during the president’s October 2025 visit to Seoul.
Trump said the U.S. had already lowered its own tariffs in accordance with the agreement and expected South Korea to meet its commitments as well. He characterized the Korean legislature’s inaction as exercising its prerogative, but reiterated that the U.S. would respond by raising duties on imports.
No timeline was provided for when, or if, the tariff increase will be implemented or could be reversed, leaving South Korean exporters and investors alert to further developments.
