By Hyunjoo Jin
SEOUL, Feb 24 (Reuters) – Hyundai Motor President Sung Kim on Tuesday urged South Korea to swiftly pass legislation for a $350 billion U.S. investment package, cautioning the Trump administration may escalate tariff pressure on sectors such as autos despite its legal setback.Kim made the comments at a meeting with opposition lawmakers and business association officials to discuss the investment package which forms part of a U.S. trade deal agreed last year, which would see Washington lowering tariffs from 25% to 15%.
U.S. President Donald Trump has threatened higher tariffs on goods from countries that “play games” with their existing U.S. trade agreements, after the U.S. Supreme Court struck down his universal tariffs.
The Korean government said on Monday it will stick to its trade deal reached last year.
“I think that with the reciprocal tariffs now nullified, there may be increased pressure to raise sector-specific tariffs,” Kim told lawmakers.
“Should the 25% tariffs be materialised, the competitiveness of Korean companies will inevitably weaken, at a time when the entire industry is undergoing upheaval, including the ongoing transition to electric vehicles and the acceleration of competition for autonomous driving,” he said.
Even before the Supreme Court ruling, South Korea had been scrambling to legislate the bill to enable the U.S. investments to start, after Trump threatened to increase tariffs on autos, pharmaceuticals and other goods to 25% from 15%, accusing Seoul of failing to legislate the trade deal agreed last year.
South Korean auto makers such as Hyundai and affiliate Kia have been lobbying to ensure the tariffs they face in the critical U.S. market create a level playing field with Japanese and European rivals.
Kim said the auto industry had been undergoing a “major crisis” due to U.S. tariffs that kicked off last year, and that he expected sectoral tariffs, in areas like steel and autos, are highly likely to remain in place.
HYUNDAI, KIA SUFFER $5 BLN HIT
Hyundai and Kia had already suffered a combined 7.2 trillion won ($4.98 billion) financial hit from U.S. tariffs last year, and this could increase this year should tariffs be brought back to 25%, Kim said.
After Friday’s legal setback, Trump quickly introduced a new 15% universal import duty and ordered new investigations that rekindled concerns about tariffs on autos, chips and other sectors.
Kim told lawmakers that the court ruling may even accelerate Trump’s tariff push, lawmaker Park Soo-young said at a media briefing after the meeting.
($1 = 1,446.1500 won)
(Reporting by Hyunjoo JinEditing by Ed Davies and Michael Perry)
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