South Korea's exports of auto parts to the United States fell in 2025 for the first time in five years. Domestic automakers expanded local sourcing in the U.S. amid tariff measures. According to data from the Korea Auto Industries Cooperative Association, shipments declined 6.7 percent from a year earlier to $7.67 billion.
South Korea's shipments of automotive parts to the United States declined 6.7 percent from a year earlier to $7.67 billion in 2025, marking the first annual fall since 2020, when exports dropped 11.5 percent. Exports to Korea's largest overseas market had risen steadily in recent years, from $6.91 billion in 2021 to $8.03 billion in 2022, $8.08 billion in 2023, and $8.22 billion in 2024.
The Korea Auto Industries Cooperative Association attributed the decline to proposed 25 percent tariffs on auto imports under the Donald Trump administration, which dealt a serious blow to South Korea's automotive exports and the broader industry. Industry analysts noted that higher tariffs prompted automakers, including Hyundai Motor Co. and Kia Corp., to expand local parts procurement in the U.S.
The U.S. began imposing a 25 percent tariff on imported auto parts in May last year. Under an agreement between Seoul and Washington, tariffs on South Korean auto parts were reduced to 15 percent, retroactive to Nov. 1. However, Trump threatened to raise "reciprocal" tariffs and duties on autos, lumber, and pharmaceuticals from South Korea to 25 percent from 15 percent, citing delays in the parliamentary process to pass a special investment bill for implementing a trade deal.
Under the deal, South Korea committed to investing $350 billion in the U.S., among other pledges, in return for the U.S. lowering reciprocal tariffs on South Korea to 15 percent from 25 percent. These tariff shifts add uncertainty to the future of Korea's auto parts sector.
