Hyundai, Kia costs increase with Trump's tariffs

Tariffs affect South Korea's free trade deal with the US.

    Daniel Han of Hyundai introduces the 2019 Veloster at the North American International Auto Show (NAIAS) on January 15, 2018 in Detroit, Michigan. The show is open to the public from January 20-28.  Scott Olson/Getty Images/AFP [AFP]
    Daniel Han of Hyundai introduces the 2019 Veloster at the North American International Auto Show (NAIAS) on January 15, 2018 in Detroit, Michigan. The show is open to the public from January 20-28. Scott Olson/Getty Images/AFP [AFP]

    South Korea will "deploy all possible means" to respond to US President Donald Trump's decision to impose tariffs on steel and aluminium imports, the country's finance minister has said.

    Last week, Trump pressed ahead with steep import tariffs of 25 percent on steel and 10 percent for aluminium, but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier "no-exceptions" stance.

    Waiver request

    South Korea, the third-largest steel exporter to the US and a strategic ally on the Korean Peninsula, has already put in a request for a waiver.

    "We will make clear what our stance is," Finance Minister Kim Dong-yeon said on Monday at a policy meeting in Seoul.

    "[The government] will deploy all possible means to respond to US steel tariffs measures and make an all-out effort," he added, without elaborating.

    South Korea's minister for trade, Kim Hyun-chong, who has visited the US twice in recent weeks to seek ways to minimize the damage to South Korean steelmakers, will depart for the US again on Tuesday, a ministry spokeswoman said.

    Hyundai costs

    South Korea's Hyundai Motor will pay higher raw material costs due to Trump's tariffs on steel and aluminium, a senior South Korean government official said last week.

    "Higher tariffs will increase costs of Hyundai and Kia, putting them at a disadvantage compared with their rivals in the United States," the senior trade ministry official told reporters in a background briefing.

    The official said the tariffs would affect the renegotiation of the bilateral free trade deal with the US that is currently under way.

    TPP

    South Korea's government will also decide on whether to join the Comprehensive and Progressive Trans-Pacific Partnership within the first half of this year, Kim said at the meeting.

    Eleven countries, including Japan and Canada, have signed the landmark Asia-Pacific CPTPP trade agreement without the US, in what one minister called a powerful signal against protectionism and trade wars.

    "The government has been reviewing the economic validity of CPTPP, and will draw agreement between the related government agencies about joining it within the first half," Kim said.

    South Korea: Which way forward?

    Inside Story

    South Korea: Which way forward?

    SOURCE: Reuters news agency


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