US to Cut Auto Tariffs for Japan; South Korea Awaits Similar Deal

The United States will begin  cutting import tariffs on Japanese cars and auto parts to 15%  this week as part of a trade agreement between the two countries. The new tariff rate takes effect on  Tuesday , following an executive order signed earlier this month by US President  Donald Trump .

The  current tariff  on Japanese vehicles is  27.5% , which includes a 2.5% standard duty and an extra 25% added under a national security rule known as  Section 232  of the Trade Expansion Act of 1962. This law allows the US president to raise tariffs on imports if they are seen as a threat to national security.

Under the new deal, that rate will drop to  15% , giving Japanese carmakers better access to the American market.

South Korean carmakers are still paying the full  25% sectoral tariff , although a similar agreement to reduce the rate to 15% was reached with South Korea in  July . However, that deal is still being finalized, and it’s unclear when the lower tariff will be applied.

 On  Monday , South Korea’s Trade Minister  Yeo Han-koo  arrived in the US to continue talks on the matter. He said Seoul is working hard to ensure the tariff cut for Korean vehicles is also put in place “ as quickly as possible .”

 “We’re still in the middle of negotiations, so we’re staying calm and focused,” Yeo told reporters. He plans to meet with US Trade Representative  Jamieson Greer  and other officials to push the deal forward.

The US is a major export market for South Korea’s auto industry. In  2024 , Korean car exports to the US reached  \$34.7 billion , making up  49.1%  of the country’s total car exports.  Hyundai Motor Group  exported about  970,000 vehicles , and  GM Korea  sent around  410,000 vehicles  to the US last year.

Korean automakers are hoping the tariff cut will happen soon, allowing them to stay competitive in one of their biggest markets.