South Korean automakers at risk of US losses as tariff gap widens with Japan



Analysis South Korean automakers at risk of US losses as tariff gap widens with Japan US duties on Korean cars puts Seoul at a competitive disadvantage in largest overseas market amid tense trade talks John LeeSeptember 16, 2025 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON An illustration of cars lined up on a dock waiting to be loaded onto a container ship \| Image: Korea Pro The U.S. began imposing a 15% tariff on Japanese vehicles on Tuesday even as South Korean auto exports remain subject to a 25% rate, threatening lasting damage to a core export industry and exposing the Lee Jae-myung administration’s narrowing strategic options. The tariff gap, born from separate investment-for-access deals, is already reshaping automotive trade flows and investment decisions. The disparity underscores the structural risks of Seoul’s ongoing and “intense” talks with Washington, leaving South Korean automakers facing escalating disadvantages in their largest foreign market, with no near-term resolution in sight. EXPORT LOSSES DEEPEN The economic impact is mounting. © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01Why South Korea cannot rebalance growth without stronger regional clusters 02Samsung, SK Hynix rejection exposes South Korea’s chip-grid financing problem 03Trump’s Cheongung social media post tests Seoul’s refusal to arm to Ukraine 04Lee Jae Myung risks public trust as South Korea rewires its justice system 05South Korea turns to Central Asia as Iran war tests its energy resilience 06Houthi seizure of Mokha sharpens South Korea’s Hormuz deployment dilemma 07Japan’s stronger yen may cut Korea’s import bill while raising funding costs 08South Korea leans on Europe as Hormuz deployment choices grow narrower

Analysis

South Korean automakers at risk of US losses as tariff gap widens with Japan

US duties on Korean cars puts Seoul at a competitive disadvantage in largest overseas market amid tense trade talks

John LeeSeptember 16, 2025

South Korean automakers at risk of US losses as tariff gap widens with Japan

An illustration of cars lined up on a dock waiting to be loaded onto a container ship | Image: Korea Pro

The U.S. began imposing a 15% tariff on Japanese vehicles on Tuesday even as South Korean auto exports remain subject to a 25% rate, threatening lasting damage to a core export industry and exposing the Lee Jae-myung administration’s narrowing strategic options.

The tariff gap, born from separate investment-for-access deals, is already reshaping automotive trade flows and investment decisions.

The disparity underscores the structural risks of Seoul’s ongoing and “intense” talks with Washington, leaving South Korean automakers facing escalating disadvantages in their largest foreign market, with no near-term resolution in sight.

EXPORT LOSSES DEEPEN

The economic impact is mounting.

South Korean automakers at risk of US losses as tariff gap widens with Japan

LATEST ANALYSIS

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John Lee