JAKARTA One by one, car manufacturers that produce or sell cars in the United States reported losses in the second quarter of 2025 due to import rates imposed by the United States on vehicles and spare parts.
The latest is South Korean automotive giant, Hyundai Motor. The company reported a 16 percent decline in operating profit in the second quarter of 2025. More worrying, Hyundai warned that this impact would get worse in the next quarter.
Reuters reported on Thursday, July 24, the decline in profit is in a sharp spotlight for South Korean officials who are now under great pressure to reach a trade agreement with the US. Moreover, Washington and Tokyo have just reached an agreement that will cut fares for Japanese competitors.
Hyundai, along with its affiliate Kia, which is the third largest automotive group in the world by sales, recorded an operating profit of 3.6 trillion won (2.64 billion US dollars) for the April-June period. This figure is well below 4.28 trillion won recorded in the same period last year. Hyundai specifically stated that the US tariff had burdened the company with 828 billion won (606.37 million US dollars) in the second quarter, and is predicted to increase in the third quarter.
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Despite the tough challenges, Hyundai is still sticking to their annual profit target for now. However, they will update the plan once the August 1 deadline for reciprocal rates comes into effect.
Hyundai Motor Finance Officer, Lee Seung-jo, expressed his hope that the US tariff on Korean cars would "slightly decrease" from the current 25 percent, although it is difficult to predict how much it will decrease.
It is known that the tension felt by South Korean manufacturers is increasing following the agreement between the United States and Japan which reduced automotive import rates to 15 percent. This agreement also freed Japan of additional levies previously planned for various other export goods. The move is considered to benefit Japan unilaterally, while Korean automotive manufacturers feel it is being treated unequally and worried about its impact on their competitiveness in the global market.
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