Hyundai Warns U.S. Auto Tariff Would Be 'Devastating'
(Bloomberg) -- Hyundai Motor Co. joined a chorus of rebuke from global automakers against possible import tariffs by the Trump administration, warning the duties would be “devastating” to the Korean automaker and its U.S. operations.
The tariffs “would not only harm Hyundai Motor’s U.S. business operations and the American workers and communities the company supports, but it would also jeopardize Hyundai Motor’s plans for additional U.S. investments,” Hyundai Motor said in comments submitted to the U.S. Department of Commerce on June 29.
Threats of a 25 percent tariff on imported cars and parts contemplated by the U.S. has sent shivers through the global auto sector. Hyundai joins other automakers and suppliers, including General Motors Co. and Toyota Motor Corp., in slamming the plan, which seeks to place import restrictions under Section 232 of a 1960s U.S. trade law in the name of national security.
The Seoul-based carmaker insisted that its imports of cars and automotive parts into the U.S. don’t constitute a security threat, adding the U.S. and South Korea “share a common national security interest in halting North Korea’s nuclear ambitions.” Restrictions on auto-related trade would “severely weaken Korea’s ability to advance shared U.S.-Korea security interests in the region,” Hyundai said.
Hyundai has invested about $8.3 billion in the U.S., directly employs 25,000 workers there and indirectly provides another 47,000 jobs through its dealership network, according to the document. The world’s fifth largest automaker together with affiliate Kia Motors Corp. disclosed in 2017 a plan to spend $3.1 billion in the U.S. in the five years through 2021.
The South Korean automaker, which domestically manufactures about half of all Hyundai cars sold in the U.S., said that a 25 percent import tax on auto parts would push up its production costs by a 10 percent a year at its plant in Alabama, the document said.
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