The Donald Trump administration noted on the 27th that it is inevitable that domestic corporations will see a drop in profitability regarding the decision to impose a 25% tariff on all cars and parts imported into the United States.
Kim Chang-ho, a researcher at Korea Investment Securities, said, "Korean automakers have the largest proportion of imported cars among those sold in the United States," adding, "Although President Trump mentioned that "Hyundai has no tariff" regarding Hyundai Motor Group's $21 billion (about 31 trillion won) investment, this is limited to cars produced in the U.S. using U.S. materials and supplies."
Kim forecasted that the tariff rate on cars and parts will likely not be finalized at 25%. However, he evaluated that if a worst-case scenario occurs with a 25% tariff on Mexican imports and a 15% tariff on Korean goods, it will inevitably impact the operating profits of domestic corporations.
The companies that Kim estimated would experience a significant drop in revenue are NEXEN TIRE, Hanon Systems, Kumho Tire, HYUNDAI WIA, Hyundai Motor, Kia, Korea Tire, HL Mando, and Hyundai Mobis in that order.
Kim projected that regardless of the actual tariff rates, the stock price trends in the automotive sector may not be favorable. This was due to the fact that during Trump's first term, although the auto tariff rate was concluded at 0%, companies suffered from uncertainty and recorded poor revenue.
Kim stated, "The automotive sector's revenue was poor early in Trump's first term, and it will be the same for the second term," adding that there is no need to directly confront Trump in the early stages of his term.