Hyundai Motor Shares Fall Amid US-South Korea Trade Deal Amidst Analysts' Bullish Predictions

Hyundai Motor's shares have fallen 4.2% following a US-South Korea trade deal that imposes a 15% tariff on South Korean auto exports. Analysts predict a 27.07% upside potential for Honda Motor Co Ltd's shares, with an average one-year target price of $40.47. The current market metrics suggest a compelling buy opportunity.

Hyundai Motor's shares have fallen 4.2% following a US-South Korea trade deal that imposes a 15% tariff on South Korean auto exports. The agreement, which reduces sectoral tariffs on Korean cars to 15% from the previous 25%, has raised concerns for Korean automakers. Hyundai Motor's stock decline comes as the company's exports to the US, which account for over 50% of its total car exports, face higher tariffs [2].

Analysts predict a 27.07% upside potential for Honda Motor Co Ltd's shares, with an average one-year target price of $40.47. The current market metrics suggest a compelling buy opportunity for Honda, given the reduced competition from Korean automakers due to the new tariffs [1].

The trade deal, which was finalized ahead of President Trump's Aug. 1 deadline for foreign trade agreements, also includes a $150 billion shipbuilding fund to revive the US shipbuilding industry. This fund is expected to benefit South Korean shipbuilders, who are poised to expand in the US market [2].

While the trade deal provides some certainty for Hyundai Motor Manufacturing Alabama, which relies on parts from South Korea, the 15% tariff on auto exports is expected to increase costs and potentially impact profitability. Hyundai Motor Group has stated that it will take various measures to minimize the tariff impact while enhancing product quality and brand value through technology innovation [2].

The trade deal also leaves sectoral tariffs on steel and aluminum unchanged at 50%, raising concerns for Korean steelmakers who had hoped for tariff-free export quotas. Korean steel exporters now face competition from the EU and Mexico, which are expected to enjoy partial exemptions on their shipments [2].

Despite the challenges posed by the new tariffs, the trade deal has eased uncertainty for South Korean chip exports, with Commerce Secretary Howard Lutnick stating that South Korea will "not be treated any worse than any other country on semiconductors and pharmaceuticals" [2].

References:
[1] https://www.wsfa.com/2025/08/01/local-car-manufacturer-reacts-president-trumps-trade-agreement-with-south-korea/
[2] https://www.kedglobal.com/business-politics/newsView/ked202508010003