BY COMFORT OGBONNA
Shares of South Korea’s major automakers recovered from steep early losses on Tuesday after U.S. President Donald Trump said in a social media post that he plans to raise tariffs on South Korean goods, including automobiles, to 25% from the current 15%, rattling markets before prompting a reassessment by investors.
Hyundai Motor shares reversed sharp declines to trade 1.1% higher after earlier falling as much as 4.8% in volatile trading. Sister company Kia Corp also pared losses, ending down 1% after having dropped as much as 6% earlier in the session. Auto parts maker Hyundai Mobis was trading 0.1% lower, having earlier been down as much as 5.7%, reflecting initial concerns over the potential impact of higher U.S. trade barriers on the sector.
The broader South Korean market showed resilience despite the tariff-related uncertainty. The benchmark KOSPI index was trading up 1.2% as of 0150 GMT, supported by gains in heavyweight stocks and investor expectations that any tariff changes may be less severe or delayed.
Currency markets reacted more cautiously. The South Korean won weakened 0.52% to 1,451.1 per dollar shortly after onshore trading opened in Seoul at 0000 GMT, reversing part of the previous session’s strength, when the currency had appreciated by as much as 2%. Traders said the won came under pressure as investors weighed the potential fallout from higher tariffs on exports to the United States.
Trump said on Monday that he was increasing tariffs on South Korean imports tied to autos, lumber and pharmaceuticals to 25%, accusing South Korea’s legislature of failing to fully honor its trade commitments with Washington. However, he did not specify when the higher tariffs would take effect or what particular developments had prompted the decision, adding to market uncertainty.
Some analysts noted that trade discussions between South Korea and the United States had already reached broad agreement at the presidential level, suggesting that the tariff threat could be part of a negotiating tactic rather than an immediate policy shift. Kim Joon-sung, a senior analyst at Meritz Securities, said auto export tariffs to the United States were still expected to be reaffirmed at the existing 15% level, easing fears of a sudden escalation.
Investors appeared to take comfort from those views as the session progressed, helping auto stocks recover from their intraday lows. Still, market participants said continued volatility is likely as clarity emerges on the scope, timing and enforcement of the proposed tariff increases, particularly given the importance of the U.S. market to South Korea’s auto industry.
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