South Korea's auto association: It is fortunate that the tariff rates were reduced to 15%

South Korea's auto association: It is fortunate that the tariff rates were reduced to 15%

South Korea's auto association has expressed relief over the reduction in tariff rates on imports from the United States. The new trade deal, announced by President Donald Trump on July 30, 2025, has set a 15% tariff on South Korean autos, down from the previously threatened 25% rate [1]. This development is particularly favorable for the South Korean automotive industry, which is a significant player in the global market.

Under the terms of the agreement, South Korea has committed to investing $350 billion in U.S.-owned and controlled projects, with $100 billion earmarked for the purchase of liquified natural gas (LNG) and other energy products from the United States [2]. The deal also includes a provision for South Korea to be fully open to trade with the U.S., including sectors such as automobiles, trucks, and agriculture [3].

The reduction in tariff rates is seen as a positive step by the South Korean auto association, which had been under pressure due to the potential 25% tariff. The lower tariff rate will help reduce the cost of imports and potentially increase the competitiveness of South Korean auto products in the U.S. market [4].

The agreement also addresses South Korea's commitment to invest in U.S. shipbuilding, a sector where the U.S. has seen a decline in capacity. This investment will not only boost South Korea's shipbuilding industry but also address U.S. security concerns [1].

The new trade deal is part of a broader strategy by President Trump to renegotiate trade agreements with key U.S. allies and trading partners. While the exact terms and implications of the deal are yet to be fully detailed, the initial reaction from South Korean officials has been positive, with President Lee Jae Myung stating that the deal puts South Korea on an equal or better footing compared to other countries [2].

The auto association's optimism is tempered by the understanding that the full extent of the deal's impact will become clearer as more details are revealed, particularly during President Lee's upcoming visit to the White House [3]. The association will continue to monitor the developments closely to ensure that the benefits of the trade deal are fully realized.

References:
[1] https://www.reuters.com/world/asia-pacific/trump-says-us-will-set-15-tariff-south-korean-imports-under-new-deal-2025-07-30/
[2] https://www.yahoo.com/news/articles/trump-announces-deal-impose-15-234517036.html
[3] https://finance.yahoo.com/news/trump-strikes-trade-deal-south-021948029.html
[4] https://www.fxstreet.com/news/us-president-donald-trump-announces-a-trade-deal-with-south-korea-reuters-202507302316