In early April, U.S. President Donald Trump is expected to announce additional auto import taxes, which could have an immediate impact on South Korea's auto industry.
As part of his larger plan to lower America's trade imbalance, support American manufacturing, and accomplish other policy goals including reducing illegal immigration and drug smuggling, Trump has set the announcement for April 2.
Concerns are mounting that South Korea, Asia's fourth-largest economy, may suffer as a result of Trump's tariff-driven trade policy. Yonhap News Agency reports that the nation's $55.7 billion trade surplus with the United States last year may draw attention from the Trump administration. "I believe we'll do it on April 2. Is that correct? According to reports, Trump asked an adviser, who verified the date.
The president did not, however, specify whether the announcement would just describe future actions or if the tariffs would be put into effect right away. With almost half—49.1%—of South Korea's $34.7 billion worth of vehicle exports going to the United States last year, the country continues to be a vital export market for South Korean manufacturers. Under a bilateral free trade agreement, South Korean automobiles have not been subject to U.S. tariffs since 2016.
This proposed action is in line with the Trump administration's initiatives to implement "reciprocal" tariffs, which would make sure that taxes on American imports are equal to those levied by other countries on American exports. As of March 12, the administration has already imposed a 25% tariff on imports of steel and aluminium, and it is reportedly thinking about implementing similar regulations for pharmaceuticals and semiconductor chips.
Officials in South Korea are keeping an attentive eye on the situation, especially considering the political unrest that has persisted in Seoul since impeached President Yoon Suk Yeol sought to impose martial law last December. At an international security event in Munich this Saturday, Foreign Minister Cho Tae-yul has stated that he plans to speak with U.S. Secretary of State Marco Rubio about the tariff problem.
Trump had originally intended to impose a 25% tax on goods from Canada and Mexico, but he has already imposed a 10% duty on all imports from China. However, after both countries decided to step up efforts to combat drug trafficking along their borders with the United States, that action was temporarily put on hold.
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