South Korea tariff deal with US: What it means for automotive

The deal, which is yet to be legally finalised, sees the tariffs on South Korea set at the same rate as the likes of the EU and Japan. South Korea also committed to a $350bn investment in the US, with a share of $200bn allocated for semiconductors and nuclear energy, and $150bn going towards shipbuilding in the US.

Already delayed multiple times, the finalisation of the framework is highly anticipated by the automotive logistics industry, as it looks for certainty among the changing trade dynamics.

Regional tariffs, trade deals, and what they mean for automotive logistics and supply chains

Automotive manufacturers and logistics providers face a shifting geopolitical and regulatory landscape as the US recalibrates trade relations with key vehicle- and parts-exporting nations.

Megan Kelly

Automotive Logistics understands that FVL firms operating between the regions are still facing uncertainty as to when the tariffs will take effect, affecting hundreds of thousands of vehicles in vessel transit every month.

On the OEM side, the lowered tariffs will make South Korean vehicles by the likes of Hyundai, Kia and Genesis more cost-competitive than they would’ve been had the 25% tariff been implemented, and also could give them an advantage in the US market over OEMs based in higher tariffed countries like Canada and Mexico.

South Korea’s investment promises for the likes of semiconductors and shipbuilding could also boost manufacturing and supply chains in the US as well as developments in intermodal freight corridors and port expansions.

The two countries are set to meet in a summit within the next two weeks to finalise the details and sign the deal.