After the U.S. Supreme Court ruled in February that the reciprocal tariff imposed by the Donald Trump administration was illegal, Korea's export corporations have been moving quickly to get refunds for the tariffs they paid in the United States. However, Hyundai Motor Group, which is entangled with product tariffs on automobiles, is taking a reserved stance. The government, which led past tariff negotiations, also stepped back, saying, "Refunds are an issue corporations must resolve on their own."
In business circles, there is an interpretation that Hyundai Motor and the government are moving cautiously, considering the possibility that relations could sour with the Trump administration, which touts tariffs as a key achievement.
◇ Battery sector aggressively seeking refunds
On Feb. 20, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president blanket authority to impose tariffs, and that the Trump administration's reciprocal tariff on countries exporting to the United States was illegal. As a result, corporations exporting to the United States gained a path to get the reciprocal tariff refunded.
According to the Supreme Court's ruling, items eligible for refunds include auto parts, batteries, electronics, machinery and equipment, and consumer goods. Finished vehicles are classified under product tariffs rather than reciprocal tariffs and are not eligible for refunds. Steel, semiconductors, and aluminum are also exempt from the reciprocal tariff and were excluded from refunds.
As of the 30th, the battery sector has taken the most proactive steps to secure U.S. tariff refunds, according to business circles. Battery manufacturers such as LG Energy Solution, Samsung SDI, and SK On produce products in the United States, but they source materials and parts from Korea or other countries, so they struggled with the tariffs.
LG Energy Solution moved fastest once the tariff refund application process began in April, two months after the Supreme Court ruling. It applied for a refund totaling about 300 billion won in tariffs and is said to have already received more than 100 billion won back.
Other domestic battery companies in similar circumstances to LG Energy Solution are also actively filing for refunds. Samsung SDI has already applied to the U.S. government for a tariff refund, and SK On, after various preparations, plans to apply soon.
Battery materials corporations, including Enchem, which produces electrolytes, have already applied for refunds and received part of the money back or are proceeding with the application process.
◇ Hyundai Motor Group stays cautious… "Relations with the United States matter"
Several other domestic export corporations have either applied for refunds or are preparing to do so. Hankook Tire has already completed its application, and auto parts corporations with U.S. subsidiaries are proceeding with preparations. Home appliance manufacturers are doing the same. Daol Investment & Securities said LG Electronics, which paid 600 billion won in tariffs last year, has pursued the refund process, and the refund could be finalized as early as the second quarter and reflected in its earnings.
Some large exporting corporations, however, remain cautious about tariff refunds. The prime example is Hyundai Motor Group. Hyundai Motor is said to be preparing a "two-track" strategy under which the group sets the broad direction for U.S. tariff refunds while each affiliate prepares the detailed procedures.
Hyundai Motor and Kia, as finished-vehicle manufacturers, do not plan to apply for reciprocal tariff refunds. Finished vehicles are classified under product tariffs rather than reciprocal tariffs and are therefore excluded from refunds. Hyundai Motor and Kia each produce half of their total sales volume at plants in Alabama and Georgia. Because some parts are sourced from Korea and elsewhere, they can get refunds on parts-related tariffs, but the amounts are said to be minimal.
Parts affiliates are in a different situation. In the case of Hyundai Mobis, a significant portion of the items needed to make parts in the United States are sourced domestically, so if it applies, the amount refundable would be large. Hyundai WIA, which has a production subsidiary in Mexico, also has items eligible for refunds. These affiliates are currently identifying the scope of refundable tariffs and plan to begin applying once the group makes a decision.
According to business circles, Hyundai Motor Group is carefully weighing whether its affiliates should apply for tariff refunds. If they apply, they could receive a significant sum, but there are concerns they could face retaliation in other ways from the Trump administration. In particular, Hyundai Motor, as a global finished-vehicle group, is a representative private corporation on the tariff front. If it applies for refunds, it could become a target of the White House.
In fact, after the Supreme Court's ruling, President Trump signaled publicly that corporations attempting to secure tariff refunds would face disadvantages. In an interview with CNBC in April, he said, "If they don't try to get refunds, it would be because they know me very well," and added, "I will certainly remember the corporations that do not apply for refunds."
◇ Government steps back, "not even tracking the numbers"
Inside and outside business circles, it is estimated that roughly 6,000 domestic export corporations can apply for tariff refunds in the United States. The government, however, is drawing a line, maintaining that corporations must apply for tariff refunds on their own.
When the Trump administration took office last year and signaled it would impose reciprocal and product tariffs on countries exporting to the United States, the government launched an active diplomatic push to minimize damage to corporations. Kim Yong-beom, Presidential Chief of Staff for Policy, and Kim Jung-kwan, Minister of the Ministry of Trade, Industry and Resources, visited the United States multiple times last year for tariff negotiations.
Many interpret the government's step back from tariff refunds as a response to the Trump administration, similar to Hyundai Motor Group. With President Trump publicly warning he will watch whether corporations apply for refunds, if the government were to take the lead, it could escalate into a trade dispute between Korea and the United States.
A business community source said, "Because Korea has a high share of exports to the United States, it became, along with Japan, a target of the Trump administration's high tariffs, and Hyundai Motor Group was a representative corporation that suffered damage," and added, "If they push more aggressively for tariff refunds than other countries or corporations, concerns would be high that they could face retaliation again."
Some, however, say corporations are struggling as the government steps away from the tariff refund issue. According to business circles, relevant government ministries such as the Ministry of Economy and Finance and the Korea Customs Service have yet to properly grasp the actual number of corporations eligible for tariff refunds or the scope of potential refunds.
An official at an export corporation said, "The standards for tariff refunds vary, so applications are very complex and the procedures are demanding," and added, "Large corporations with global public affairs organizations quickly decided on documentation and application items and have often already filed, but small corporations without resources are facing confusion due to the lack of clear guidelines."