The 25% tariff on automobiles produced outside the United States during the Trump administration officially took effect on 3rd (local time).

The 25% tariff on automobiles announced by U.S. President Donald Trump on 26th of last month was implemented as specified in the proclamation at 12:01 a.m. Eastern Standard Time on the same date (1:01 p.m. Korean Standard Time on 3rd).

A 25% tariff on cars produced outside the U.S. officially takes effect with export vehicles being lined up at Pyeongtaek Port in Gyeonggi Province on Nov. 3. /Courtesy of Yonhap News Agency

Accordingly, automobiles produced in Korea will incur a 25% tariff when exported to the United States from this point on. Automobiles currently in transit to the local area and awaiting customs clearance in the tariff zone are also subject to the tariff.

Automobiles are Korea's number one export item to the United States, and the domestic industry is expected to be impacted. Last year, Korea's automobile exports to the United States amounted to $34.744 billion (about 51 trillion won), accounting for nearly half (49.1%) of the global automobile export total of $70.789 billion.

Last year, the export volume of Hyundai Motor Company and Kia was about 970,000 units, while GM Korea's export volume was around 410,000 units. Hyundai Motor Group is expected to mitigate the shock from the tariff bomb by increasing production in the United States.