Hyundai's US tariff headache, explained in 2 minutes
Tariff impacts
New 15% US tariff on Korean car exports replaces previously threatened 25% duty.
Hyundai Motor and Kia export 1.5 million vehicles to the US annually — about 25% of total global sales.
Estimated 3-4% hit to overall profit margin, prompting strategic overhaul.
No room for big price hikes
Raising prices by over 3% would be needed to offset losses.
But Hyundai risks losing competitiveness if it increases prices more than rivals like Toyota, which has already raised prices by $200–$270.
Hyundai's pricing strategy likely to focus on regional customization, option flexibility, including removal of some standard features.
Production shift on the table
Hyundai is in talks with labor unions to shift production of high-demand models — especially hybrids and SUVs — from Korea to the US.
All Hyundai Motor and Kia hybrid models are currently made in Korea despite surging US demand.
Labor union hurdle
A 1999 labor agreement requires union approval for any overseas production shift.
Experts say this will need to be renegotiated due to what's described as a 'life-or-death threat' to Hyundai's export-driven business model.
What's at stake
Hyundai sold 28,733 hybrid vehicles in the US in July, up 38% year-on-year.
Shifting hybrid production could help avoid tariffs and protect market share, but labor resistance could delay plans.
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