Hyundai Motor falls 1.6% even after USI tariff deal: Kia -2%

Hyundai Motor falls 1.6% even after USI tariff deal: Kia -2%

Hyundai Motor Group and its affiliate Kia Corp have been navigating the challenges posed by US tariffs, with significant market reactions following recent developments in trade negotiations. Hyundai Motor Group Chairman Chung Euisun is set to travel to Washington to bolster Seoul's negotiations, following the footsteps of Samsung Electronics Co. Chairman Lee Jae-yong and Hanwha Group Vice Chairman Kim Dong-kwan [1].

Hyundai Motor Group has announced a $21 billion investment in the US through 2028, including a new steel mill in Louisiana and the expansion of local production at its new Georgia manufacturing factory, Hyundai Motor Group Metaplant America [3]. This investment aims to secure a favorable tariff agreement with the US, which has set a Friday deadline to impose sweeping 25% tariffs on its trading partners [1].

Despite the investment, Hyundai Motor and Kia have been impacted by the 25 percent tariffs imposed on all auto imports into the US since April. Kia Corp has reported a quarterly operating profit slump of 25% due to tariffs, with a hit of 786 billion won ($570 million) in the second quarter [2]. However, Kia aims to increase its US market share to over 6% in the second half of the year, driven by sales of new hybrid and gasoline vehicles and the potential pullback of some rivals due to price hikes [2].

Kia's strategy to boost sales of hybrids, which are imported from South Korea, could weigh on its profit, but the company is focusing on growing its US business and diversifying its shipments to other markets to mitigate tariffs' effects [2]. Hyundai Motor Group, on the other hand, has seen its stock fall by 1.6% following the tariff deal, while Kia's stock has dropped by 2% [2].

South Korea is mounting a last-ditch effort to finalize a tariff agreement with the US, with direct backing from the country’s top business leaders. The Korean government is considering additional trade concessions, such as opening its market to US agricultural imports and a US investment package worth over $100 billion [1]. The negotiations are crucial for South Korea, as the country seeks to avoid heavy duties and secure a deal comparable to those secured by Japan and the EU.

References:
[1] https://www.kedglobal.com/business-politics/newsView/ked202507300006
[2] https://www.reuters.com/business/autos-transportation/kia-aims-win-us-market-share-tariffs-force-rivals-pull-back-2025-07-25/
[3] https://www.koreaherald.com/article/10543092