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U.S. to begin applying 15% on Japanese autos Tuesday, with Korean cars subject to 25% levy

Published: 16 Sep. 2025, 10:21

Export-bound cares are lined up at Pyeongtaek Port in Gyeonggi on Sept. 4. [YONHAP]

U.S. President Donald Trump's administration said Monday it will start implementing a lowered tariff of 15 percent on Japanese automobiles this week in line with a bilateral trade deal.

The reduced tariff rate will go into effect Tuesday, according to a government notice posted on the Federal Register, after Trump officially signed an executive order earlier this month to officially implement the deal with Japan.

Under the deal, the United States has agreed to lower tariffs on Japanese automobiles and parts to 15 percent from the current 27.5 percent — the rate that comprises the existing 2.5 percent tariff and the global sector-specific duty of 25 percent.

The 15 percent rate is higher than the current 25 percent rate levied on Korean cars, putting Korean automakers at a disadvantage.

Currently, Korean autos are subject to the sectoral tariff of 25 percent that the Trump administration has put in place under Section 232 of the Trade Expansion Act of 1962 — a law that gives the president authority to adjust imports when he determines they threaten to impair national security.

The United States has also agreed to lower the tariff on Korean autos to 15 percent as part of a bilateral trade deal, but it remains uncertain when the deal will go into force amid negotiations over its specifics.

The United States is a top auto export market for Korea.

Of Korea's total car exports last year, exports to the United States were tallied at $34.7 billion, or 49.1 percent. Hyundai Motor Group and GM Korea exported around 970,000 and 410,000 units to the United States, respectively, last year.

Korea’s auto shipments to the United States from Aug. 1 to 25 fell 3.5 percent on year to $1.58 billion, extending the losing streak to six months in a row, as the U.S. tariff shock settled in.

The Wall Street Journal estimates that Hyundai Motor Group, comprising Korea's leading automaker Hyundai Motor and Kia, incurred $1.17 billion in tariff-related losses in the second quarter.

BY KIM JU-YEON, YONHAP [[email protected]]