SEOUL SEOUL: South Korean automotive and chip companies are devising strategies to deal with hefty tariffs on their US exports, industry observers said on Wednesday, after US President Donald Trump announced his intention to impose auto duties of about 25 percent on chips and similar levels. Trump revealed his intention to impose such duties on auto imports as early as April 2 and similar or higher sectoral tariffs on semiconductors and pharmaceuticals, but did not provide specific dates for those sectors.
According to industry observers, Hyundai Motor Group has been preparing for such tariffs by accelerating efforts to increase its production capacity in the US since Trump’s re-election, Yonhap news agency reports. The South Korean automotive giant aims to increase the production capacity of its Hyundai Motor Group Metaplant America (HMGMA) in Georgia to 500,000 units per year from 300,000. Additionally, it plans to leverage production from its separate Alabama and Georgia plants, currently at 356,100 units and 340,000 units per year, respectively, to boost the group’s overall US production capacity.
The move is designed to reduce tariff-related costs by increasing the proportion of vehicles sold directly from US plants. However, since expanding local production would entail additional expenses, the industry is carefully deliberating on specific expansion strategies. About 60 percent of the nearly 1.7 million vehicles sold by Hyundai Motor and Kia in the US last year were manufactured in South Korea.
