The Korea International Trade Association (KITA) submitted a written opinion to the US Department of Commerce on June 28 with regard to its investigation on imported automobiles and auto parts based on Section 232 of the Trade Expansion Act of 1962.
“South Korea is not a threat to the security of the United States but an important market for U.S. automakers,” KITA said in its letter, adding, “At present, cars exported from the United States to South Korea are free from tariffs in accordance with the S. Korea-US free Trade Agreement (KORUS FTA) and South Korea should be exempted from Section 232 even if it is implemented.”
According to the letter, global automakers including South Korean have made a great contribution to the recovery of the U.S. auto industry by large-scale investments since the recent global financial crisis. As of 2015, no less than 411,200 Americans worked for foreign automakers in the United States. Hyundai Motor Company and Kia Motors are currently contributing significantly to the regional economy of Alabama and Georgia, respectively. Hyundai Motor Company recently announced that it would make an additional investment of US$390 million in Alabama. Kia Motors is the only major automaker in Georgia and more than 11,300 people are working for the company and its partner firms there.
The KITA pointed out that South Korea already accepted U.S. requests, during the negotiations that followed the conclusion of the KORUS FTA, by deciding to maintain a 2.5% tariff on U.S. cars for four years after the implementation of the agreement. “In addition, more recently, South Korea extended its zero tariff on American pickup trucks from 10 years to 30 years and provided an easier access to the South Korean market for U.S. automakers in terms of safety and environmental regulations,” the KITA reminded as well.