Ford continues to lobby U.S. lawmakers for higher tariffs on Korean-made vehicles. This move appears to be a response to General Motors’ (GM) dominance in the American compact car market, fueled by its small sport utility vehicles (SUVs) manufactured in South Korea.
The concern is that this internal rivalry between Ford and GM could have broader implications, potentially affecting other domestic automakers like Hyundai and Kia. Meanwhile, the U.S. government is pressing South Korea to swiftly fulfill its investment commitments, which were part of last year’s tariff negotiations.
According to global automotive industry sources on Thursday, Jim Farley, Ford’s Chief Executive Officer (CEO), has repeatedly emphasized the need for increased U.S. tariffs on Korean-made vehicles. During a second-quarter earnings call on July 28, Farley stated that some of the competitors are importing vehicles from Korea and benefiting from significant advantages.
In a subsequent interview with the Detroit News, Farley expressed even stronger opposition to Korean-made vehicles. He argued that while these cars currently face a 15% tariff, the weak Korean won effectively gives them a 20% advantage. Farley stressed the importance of leveling the playing field by raising tariffs on Korean-made vehicles.
GM’s Korean-Made Small SUVs Dominate U.S. Market; Trump Administration’s Tariffs Pressure Korean Investment in America
Farley’s persistent focus on Korean car tariffs stems from two Chevrolet small SUVs: the Trax Crossover and Trailblazer, produced at GM’s plants in Changwon and Bupyeong, respectively. The Korea Automobile Manufacturers Association (KAMA) reports that 460,826 units of these models were produced last year, with 84% (388,280 units) exported to the U.S.
Both models, priced under 20,000 USD, have captured a significant share of the local compact car market. The Trax Crossover, first exported in 2023, has maintained its position as the best-selling small SUV in the U.S. for two consecutive years, outperforming Subaru’s Crosstrek with annual sales of 200,000 units since 2024. The Trailblazer also ranked fifth in U.S. small SUV sales last year, with 100,000 units sold.
Ongoing trade tensions between the U.S. and South Korea add another layer of complexity. Last October, the two nations agreed to reduce tariffs on Korean-made cars from 25% to 15%, in exchange for South Korea’s commitment to 350 billion USD in U.S. investments. However, delays in finalizing investment details have prompted the Trump administration to demand swift action from Korea. Reports suggest that further tariff increases could be on the table. In response, South Korean Trade Minister Kim Jeong-kwan made an emergency visit to the U.S. on the 16th.
If the U.S. imposes additional tariffs on Korean-made vehicles, both GM Korea and Hyundai-Kia would likely feel the impact. Despite Hyundai and Kia’s rapid expansion of U.S. production at their new Georgia plant, opened in March last year, they still export a substantial number of vehicles from Korea. Of the 1,836,172 vehicles sold by Hyundai and Kia in the U.S. last year (including Genesis), 53% (971,073 units) were manufactured in Korea. In the first half of this year, the two companies paid approximately 3.37 trillion KRW (about 2.42 billion USD) in U.S. tariffs at the current 15% rate.