Hyundai heir to meet U.S. commerce chief for auto tariff exemption

2018.09.18 13:20:07 | 2018.09.18 15:25:15

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Chung Eui-sun, heir apparent of South Korea¡¯s second-largest conglomerate Hyundai Motor Group, will meet U.S. Commerce Secretary Wilbur Ross in Washington on Tuesday to save Korean imports from sweeping U.S. tariffs on foreign-made cars.

Chung, who has recently been promoted to executive vice chairman in a de facto replacement of his 80-year-old father Chung Mong-koo, has been granted a tete-a-tete with Ross, who acts out Trump¡¯s orders on the tariff front. Due to the urgency of the situation, he had to pass up on the chance to accompany South Korean President Moon Jae-in on his trip to Pyongyang.

Chung was the only top executive of the country¡¯s top four major conglomerates - which include Samsung, LG and SK - to miss the three-day trip to the North. His vice stood as his substitute.

U.S. President Donald Trump in May ordered the U.S. commerce department to study whether imported cars have damaged the U.S. auto industry and therefore threaten national security. The Section 232 of the Trade Expansion Act enables the U.S. to slap tariffs of up to 25 percent on all imports. The rarely-used act was revived earlier this year to curb steel and aluminum imports.

The U.S. commerce department concluded public hearings on auto tariffs in July. Chung is expected to make a last-minute appeal to the trade chief before the department delivers its final recommendation report to Trump.

For Hyundai, which exports more than 600,000 cars to the United States every year, the 25-percent tariffs could be devastating, especially at a time when it is grappling with declining sales in its two biggest markets, China and the U.S.

Hyundai Motor Co. and Kia Motors Corp., the group¡¯s flagship auto makers, operate manufacturing plants in Alabama and Georgia, respectively. Chung is likely to stress their contribution to economic growth and job creation in the two southern states. Last year, the companies also revealed plans to invest a combined $3.1 billion through 2021. In May this year, Hyundai Motor pledged another $380 million to add an engine head manufacturing facility at its Alabama factory. The company has invested about $8.3 billion in the U.S. so far.

In addition to his meeting with the commerce secretary, Chung will sit down with local lawmakers in the two states to win their support, according to a Hyundai Motor official.

Korea has already made wide concessions in the auto sector in the recently revised free trade agreement (FTA) with the U.S. Under the revised pact, the 25-percent U.S. tariffs on Korean pickup trucks have been extended another 20 years to 2041. Korea also agreed to double its import cap of U.S. cars that do not have to comply with domestic regulations.

After the Pyongyang summit, Moon will fly to New York next week for the U.N. General Assembly session, where he is expected to meet with Trump to formally sign the amended FTA.

By Lee Seung-hoon and Kim Hyo-jin

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