Both local carmakers and importers here are increasingly concerned about the possible revival of trade barriers after Donald Trump’s presidential election win last week, industry sources said Sunday.
Importers here have been taking advantage of a 4-year-old free trade pact between South Korea and the US that have reduced tariffs on vehicle imports since 2012. The tariff rate on imports and exports decreased from 8 percent to 4 percent, then to 2.5 percent. The tariff was abolished in January this year.
The abolishment of tariffs on automobiles has lowered the overall price range of imported products, contributing to an increase in the number of cars imported from the US.
But concern is rising in the auto industry due to Trump’s campaign pledge to renegotiate the free-trade deal, which he has described as a “job-killing” deal.
“Reasonable prices pushed US car brands in the Korean market. This earned 1.4 trillion won ($1.2 billion) of sales income last year,” an industry source was quoted as saying by Yonhap News Agency. “They will lose competitiveness in Korea if market prices go up following the heightened tariff wall.”
According to the Korea Automobile Manufacturer’s Association, 44,685 cars were imported from the US this year, a 24.5 percent jump on-year.
With the government banning the sales of Volkwagen and Audi vehicles in Korea over emissions scandals, US auto brands have been attempting to expand their presence in the local car market.
GM’s Cadillac saw a 31.8 percent increase in sales this year, while Ford saw an increase of 8.9 percent in overall sales here.
Japanese and German carmakers that import cars from US plants are no exception.
BMW’s SUV X models, Mercedes Benz’s SUV models, Toyota’s Camry, Sienna and Avalon are imported from US-based manufacturing plants.
By Song Ji-won(jiwon.song@heraldcorp.com)
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