South Korea enjoyed record February auto exports on strong demand in the US ahead of the looming tariffs, government said on Tuesday, while the data failed to ease concerns that Washington’s aggressive trade policy is likely to hurt foreign car sales in the world’s second-largest car market.
South Korea’s car export value rose 17.8% to $6.1 billion in February from a year earlier, according to the Ministry of Trade, Industry and Energy. It was the first time auto exports in February topped the $6 billion mark, the ministry said in a statement.
Shipments to North America rose 14.8% on-year to $3.2 billion with 85% of the exports heading to the US.
That came as American consumers rushed to buy new cars as US President Donald Trump plans to charge 25% tariffs on imported cars on April 2, which will raise prices eventually, industry sources in Seoul said. US dealers also scrambled to purchase imported models before the move, the sources added.
The trade protectionism policy is expected to dampen car exports of South Korea, home to the world’s third-largest automaker Hyundai Motor Group with two vehicle producers – Hyundai Motor Co. and Kia Corp, the sources said.
The US is South Korean automakers’ largest overseas market as car exports accounted for 27% of the Asian country’s total sales to America last year.
South Korean carmakers shipped 1.43 million vehicles to the US in 2024, more than half of their total exports of 2.78 million.
SETBACK
Washington is unlikely to exempt the tariffs on vehicles made in South Korea as the US suffered a trade deficit of $44.1 billion from the Asian country’s auto exports, out of America’s total trade shortfall of $66 billion with the peninsula last year, the sources in Seoul said.
The tariffs are predicted to slash South Korean auto exports to the US by around 20%, analysts said.
The Korea Institute for Industrial Economics & Trade expected a 20.5% decline, while IBK Economic Research Institute, a unit of Industrial Bank of Korea, saw an 18.6% drop.
The South Korean government aims to come up with plans to minimize the impact soon.
“We will collect the auto industry’s opinions on potential US trade measures and their impacts through a task force for automobile cooperation with the US and others to prepare plans early,” said the trade ministry.
By Ji-Eun Ha and Gil-Sung Yang
hazzys@hankyung.com
Jongwoo Cheon edited this article.
