Experts: Cut in tariffs on South Korea autos will help NC consumers

A key provision of the agreement was to reduce the import tariff on Korean autos and auto parts from 25% to 15% which would level the playing field between them and their Japanese competitors, according to Reuters.

On Oct. 29, the US and South Korea reached a trade deal, which is expected to lower tariffs on Korean auto imports to 15%.

“For North Carolina auto producers that rely on South Korean components, this reduction — relative to the previous 25% tariff rate — will help lower production costs by making imported parts less expensive,” continued Harris. “Likewise, for North Carolina consumers interested in South Korean-produced vehicles, the lower tariff rate will reduce purchase prices relative to the 25% rate, making these cars more affordable.”

The trade deal included details on structuring a $350 billion investment in the US in exchange for reduced import duties on South Korean commodities, particularly in the automotive industry, according to Reuters.

“The Trump administration currently imposes a 25% tariff rate on auto and auto parts imports,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. “However, imports from the European Union and Japan are subject to a reduced rate of 15%. Under the administration’s recent trade agreement with South Korea, the tariff rate on South Korean auto and auto parts imports will likewise be lowered to 15%.”

A key provision of the agreement was to reduce the import tariff on Korean autos and auto parts from 25% to 15%, which would level the playing field between them and their Japanese competitors, reported Reuters. The US is a significant market for Hyundai Motor and Kia Corp, the third-largest car manufacturer by sales.

“We appreciate the constructive efforts of the U.S. administration and the Korean government to resolve business uncertainty and support a positive future trade environment for both countries,” Hyundai Motor Group told Reuters in a statement.

The deal guarantees that companies can expand their commitment in the US by creating jobs and developing localization.

Automotive manufacturing is one of the largest industries in North Carolina.

On April 3, a 25% tariff was implemented on automobiles. A month later, on May 3, a 25% tariff was imposed on “auto parts.” Products subject to the auto or auto parts tariffs are not also subject to the 50% tariff on steel and aluminum products and steel “not melted and poured in the United States.”

In 2024, vehicles and vehicle parts were North Carolina’s fourth-largest import, but shipments have dropped off significantly since tariffs were implemented, Harris told the Carolina Journal in a previous interview. From April to July of 2025, imports declined from $2.5 billion to $1.5 billion, representing a decrease of approximately 39% compared to 2024.

“Experts: Cut in tariffs on South Korea autos will help NC consumers” was originally published on www.carolinajournal.com.