Auto Parts Industry "Threat to Corporate Survival Due to 25% US Tariff"

[Financial News] The Korea International Trade Association (KITA) announced on the 29th that President Yun Jin-sik presided over the 'Busan Auto Parts Industry Meeting' during his visit to Eden Tech, an auto parts manufacturer located in Gangseo-gu, Busan, on the 28th.
This meeting was organized as a follow-up to the outreach activities conducted by the Trade Association in the US in March and May, to listen to the voices of the auto industry directly affected by the US tariff measures. Five auto parts companies from the Busan area attended the meeting to discuss the industry's difficulties and response strategies following the recent imposition of a 25% tariff on US imports of cars and parts.
Oh Rin-tae, CEO of Eden Tech (Chairman of the Busan Auto Parts Industry Cooperative), stated, "Since May 3rd, a 25% tariff has been imposed on auto parts, causing a sharp decline in operating profits for export companies to the US. If the tariff measures are prolonged, it could threaten the survival of companies," adding, "As it is difficult for small and medium-sized enterprises to independently respond to external trade risks, active support from the government and the association is urgently needed."
Another company representative said, "Among the more than 300 types of parts directly or indirectly exported to the US, 48 types are classified as steel and aluminum derivatives and have been subject to a 25% tariff since March. The remaining parts are also subject to a general tariff of 10% and a 25% auto parts tariff, making it difficult to verify items and respond whenever tariff measures are implemented," while expressing concern that, unlike parts from Mexico and Canada that meet USMCA standards, Korean parts do not receive tariff exemptions, weakening price competitiveness.
Some companies, after discussions with finished car manufacturers, are bearing about 10% of the cost increase themselves, but if the tariff measures are prolonged, profitability will deteriorate, and exports to the US may become difficult.
Additionally, attendees of the meeting expressed concerns about the worsening export environment to the US due to the uncertainty of US tariff policies, the transfer of tariff burdens to US importers, and the reduction in demand due to increased manufacturing costs of finished cars in the US.
President Yun Jin-sik emphasized, "During my recent visits to the US, I met with governors of investment regions, members of the Senate and House, and senior officials of the Department of Commerce to highlight that our companies' active investment and exports to the US significantly contribute to the development of advanced industries and job creation in the US," adding, "I will closely identify the damage situation and voices from the field due to the US tariff measures through this meeting and actively convey them to the government and the US side."

cjk@fnnews.com Choi Jong-geun Reporter