Trump Tariffs & GM Korea: Future Concerns
- General Motors (GM) Korea is grappling with uncertainty as the Trump management's 25% tariff on imported cars looms, potentially impacting the company's U.S.
- This business model leaves GM uniquely vulnerable to the tariffs, reigniting concerns about a possible withdrawal from South Korea.
- Lee Ho-guen, an automotive engineering professor at Daeduk University, believes GM may have little reason to remain in South Korea if the U.S.
GM Korea Faces Uncertainty Amid Tariff Concerns adn Potential US Exit
Updated June 02, 2025
General Motors (GM) Korea is grappling with uncertainty as the Trump management’s 25% tariff on imported cars looms, potentially impacting the company’s U.S. exports. Unlike Hyundai and kia, which dominate the South Korean market, GM Korea primarily manufactures budget SUVs like the Chevrolet Trax and Trailblazer for the U.S. market. The Chevrolet Trax has been South Korea’s most-exported car since 2023.
This business model leaves GM uniquely vulnerable to the tariffs, reigniting concerns about a possible withdrawal from South Korea. In 2023, GM Korea shipped 418,782 vehicles, representing 88.5% of its total sales, to American consumers.
GM Chevrolet vehicles await export at the Port of incheon, South Korea. The Trump administration’s tariffs on imported cars are causing concern for the company.
(SeongJoon cho / Bloomberg via Getty Images)
Lee Ho-guen, an automotive engineering professor at Daeduk University, believes GM may have little reason to remain in South Korea if the U.S. tariffs persist.He estimates the tariffs could add $10,000 to the price of cars shipped to the U.S.
“If the U.S. tariffs remain in place, GM will no longer have any reason to stay in South Korea,” said Lee Ho-guen, an automotive engineering professor at Daeduk University.
Kim Woong-heon, an official with GM Korea’s labor union, acknowledged the rumors of a potential exit, adding that concerns about the company’s long-term commitment remain. The union fears a repeat of the 2018 factory shutdown.
“But we have painful memories of GM shutting down one of its factories in 2018, so we get nervous every time these rumors surface,” said Kim Woong-heon, an official in GM Korea’s labor union.
GM Korea’s vice president of sales, Gustavo Colossi, stated the company does not intend to respond to rumors about exiting Korea. He added that GM plans to move forward with sales strategies and introduce new models.
The union seeks measures demonstrating GM’s commitment beyond 2027,when its 10-year guarantee expires. These include manufacturing electric and plug-in hybrid vehicles in South Korea and expanding product availability in Asian markets.
GM’s future in South Korea hinges on ongoing tariff talks between U.S. and South Korean officials, aiming for a deal by July 8. South korea’s trade Minister Ahn Duk-geun considers cars “the most meaningful part of the U.S.-South Korea trade relationship.”
What’s next
Professor Lee anticipates GM may leave or considerably reduce production after the next two years, retaining only its research and development unit. A GM exit would devastate cities like Changwon, where the company employs thousands and contributes significantly to exports. Woo Choon-ae, a real estate agent in Changwon, worries about the impact on the local housing market and economy.