South Korean Auto Stocks Fall on U.S.-Korea Trade Deal News

Seoul () - Shares of South Korean car manufacturers Hyundai Motor and Kia Corporation declined on Thursday following remarks by U.S. President Donald Trump stating that the U.S. would impose a 15% tax on imports from South Korea, covering vehicles, as part of a trade agreement.

Hyundai Motor stocks declined by 2%, while Kia Corporation shares fell by 3.3%.

The agreement lowers U.S. duties on South Korean vehicles from 25% to 15%, matching the tax level applied to cars imported from Japan.

Prior to Washington implementing 25% automobile taxes in April, there were no duties on the majority of South Korean vehicle imports due to a bi-lateral commerce agreement, whereas a 2.5 percent tax applied to Japanese car imports.

Analysts noted that the agreement eliminates the 2.5% tariff benefit that South Korean car manufacturers previously held over their Japanese counterparts through the U.S.-South Korea Free Trade Agreement.

(By Hyunjoo Jin Editing by Ed Davies)