Michael Robinet, vice president at Standard & Poor's (S&P) Global Mobility, predicted that the high tariffs set by the U.S. Trump administration, scheduled for next month on the 2nd, are likely to be implemented as planned. He noted that for the time being, Hyundai Motor Company and Kia will be affected, but there is a possibility that the tariffs could normalize within six months.
Robinet recently met with ChosunBiz to discuss the impact of the Trump administration's tariffs on various countries and companies. He said, "President Trump has imposed tariffs on Mexico and Canada as announced since last month after already placing tariffs on China. The probability of following through on his statement to impose tariffs on all imported goods is over 60%."
Robinet has been working at S&P Global Mobility since 1996 and is considered one of the leading analysts in the global automotive market. S&P Global, a subsidiary of one of the top three credit rating agencies, analyzes the automotive industry and mobility market.
The Trump administration implemented an additional 10% tariff on all Chinese products on the 4th of last month and imposed another 10% on the 4th of this month. On the same day, a 25% tariff was levied on products from Mexico and Canada. President Trump has announced plans to impose high mutual tariffs on all countries worldwide, including South Korea, on the 2nd of next month.
Robinet projected that if the tariffs are implemented as scheduled next month, Hyundai Motor Company and Kia are likely to face more significant difficulties compared to their competitors. This is due to their lower proportion of local production in the United States compared to rivals such as Japan's Toyota.
According to S&P Global Mobility, as of 2023, Toyota's local production in the U.S. accounted for 56% of its total vehicle sales. Other Japanese manufacturers Honda and Nissan have local production levels exceeding 60%. In contrast, during the same period, Hyundai Motor Company and Kia's U.S. production accounted for only 38%.
Hyundai Motor Group began operations at its newly established eco-friendly vehicle factory, 'Metaflant America,' located in Georgia, USA, in October of last year. Through this newly established plant, it plans to raise its local production ratio in the U.S. to over 60% by 2027. However, quickly increasing the operational rate is expected to be challenging, leading to unavoidable impacts when the tariffs are imposed next month.
Some analysts believe that even if mutual tariffs are imposed, measures will be delayed in a short period. While President Trump imposed a 25% tariff on Canada and Mexico, he delayed the implementation on items covered under the 'United States-Mexico-Canada Agreement' (USMCA) until the 2nd of next month.
Robinet said, "The probability of the mutual tariffs being reversed within a month is less than 30%." In the cases of Canada and Mexico, there are many U.S. automotive plants, which led to the delayed measures, but he noted that there are no such interests for mutual tariffs covering all countries. He said, "Major U.S. car manufacturers, including General Motors (GM), Ford, and Stellantis, have over 60% of their production in the U.S. and can easily relocate overseas production back to the U.S.," adding that "the impact of imposing mutual tariffs will be less significant for foreign manufacturers."
However, Robinet believes there is a high likelihood that mutual tariffs will be recalibrated by country within six months. This analysis reflects Trump's negotiation style, which involves taking an aggressive stance toward the counterpart country and then modifying policies through negotiations to gain the desired benefits.
He said, "I understand that the Yoon Suk Yeol administration has closely cooperated with the U.S. on various policies since its inception. If it maintains a friendly policy tone towards the U.S. and can quickly grasp and meet the needs of the Trump administration, mutual tariffs could be recalibrated sooner than expected."