SEOUL (July 1): Hyundai Motor Co joined a chorus of rebuke from global automakers against possible import tariffs by the Trump administration, warning the duties would be “devastating” to the South Korean automaker and its US operations.
The tariffs “would not only harm Hyundai Motor’s US business operations and the American workers and communities the company supports, but it would also jeopardise Hyundai Motor’s plans for additional U.S. investments,” Hyundai Motor said in comments submitted to the US Department of Commerce on June 29.
Threats of a 25% tariff on imported cars and parts contemplated by the US has sent shivers through the global auto sector. Hyundai joins other automakers and suppliers, including General Motors Co and Toyota Motor Corp, in slamming the plan, which seeks to place import restrictions under Section 232 of a 1960s US trade law in the name of national security.
The Seoul-based carmaker insisted that its imports of cars and automotive parts into the US don’t constitute a security threat, adding the US and South Korea “share a common national security interest in halting North Korea’s nuclear ambitions.” Restrictions on auto-related trade would “severely weaken Korea’s ability to advance shared US-Korea security interests in the region,” Hyundai said.
Hyundai has invested about US$8.3 billion in the US, directly employs 25,000 workers there and indirectly provides another 47,000 jobs through its dealership network, according to the document. The world’s fifth largest automaker together with affiliate Kia Motors Corp disclosed in 2017 a plan to spend US$3.1 billion in the US in the five years through 2021.
The South Korean automaker, which domestically manufactures about half of all Hyundai cars sold in the US, said that a 25% import tax on auto parts would push up its production costs by a 10% a year at its plant in Alabama, the document said.