Seoul, March 27
US President Donald Trump's recent announcement to levy 25 per cent tariffs on all imported vehicles next month is expected to deal a heavy blow to South Korean carmakers, which largely depend on shipments to the United States, analysts said on Thursday.
Trump signed a proclamation to impose the new tariffs on foreign-made cars, light trucks and key auto parts, set to take effect from next Wednesday.
South Korea exported US$34.7 billion worth of vehicles to the U.S. last year, accounting for nearly half of the country's total car exports in the year at $70.8 billion, reports news agency.
Under the Korea-U.S. Free Trade Agreement (KORUS), Korean-made cars have been exempt from tariffs in the U.S.
Experts noted that the 25 percent tariffs will increase the price of Korean cars sold in the U.S., ultimately impacting South Korea's economy.
A report published by the IBK Economic Research Institute estimated that South Korea's car exports to the U.S. will decrease by 18.59 percent once Washington imposes 25 percent tariffs on car imports.