As major Korean exporters brace for the impact of U.S. tariffs, Hyundai Motor Group stated that it will not raise vehicle prices in the U.S. for now.

Speaking at the Seoul Mobility Show 2025 in Ilsan on Thursday, Hyundai Motor Co. Chief Executive Officer Jose Munoz told reporters that the company currently has no plans to increase prices in the U.S. market.

Despite efforts to expand its local supply chain, Hyundai remains exposed to tariff impacts due to its high reliance on Korean manufacturing. Its Hyundai Motor Group Metaplant America facility, with an annual production capacity of 300,000 units, has been operational for less than six months but is still running below 1 percent capacity. The automaker’s other U.S. facilities, the Hyundai Alabama and Kia Georgia plants, are operating at 97.7 percent and 104.1 percent capacity respectively, leaving little room for a significant boost in U.S. production.

Rather than raising prices immediately, industry experts suggest companies will seek to absorb short-term revenue losses while expanding domestic sales and making small price adjustments on new and facelifted models in the United States.

“To offset potential losses in the United States, companies may need to revitalize the sluggish domestic market from 2024,” Korea Automobile Manufacturers Association President Kang Nam-hoon said, adding that government measures such as extending the reduction in the individual consumption tax could help support the industry.

While Hyundai has ruled out immediate price hikes, broader increases for redesigned and next-generation models remain on the table. The automaker plans to launch the next-generation Palisade in the United States later in 2025.

The battery industry, which relies heavily on U.S. exports, is also weighing its pricing strategy. “If tariffs push up electric vehicle prices in the United States, cell manufacturers and automakers will try to lower production costs,” an industry insider said. “Battery material suppliers could face strong pressure to reduce supply prices.”

The global supply chain is also experiencing ripple effects. A primary U.S. auto parts supplier has come under pricing pressure after a secondary supplier in Germany, which lacks U.S. production facilities, demanded price increases to offset the costs of the Trump administration’s 20 percent tariff on European Union imports.

“The high tariffs imposed by the Trump administration are disrupting global electronics supply chains,” an industry expert said. “Localization is becoming a key competitive factor, and American consumers will ultimately bear the cost increases.”

Industry insiders expect intense negotiations between Korean exporters and U.S. importers over how to share the tariff burden. Trade experts predict that while some of the tariff costs will be passed on to U.S. consumers, much of the increase will likely be split between American importers and Korean exporters.

Hong Ji-sang, senior researcher at the Institute for International Trade of the Korea International Trade Association, noted that the U.S. government has made it clear it will not tolerate sharp consumer price hikes due to tariffs. “Local retailers, who are reluctant to raise prices, will likely pressure Korean exporters to lower supply costs - effectively passing the tariff burden to the Korean parties,” Hong said.

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