Diverting Export Destination of Auto Parts Produced in China
Hyundai Mobis has reportedly diverted the export destination of the parts produced at its factory in China to Hyundai Motor and Kia Motors factories in the EU from the two carmakers’ plants in the United States. Hyundai Mobis made the decision as U.S. tariffs on parts manufactured at its plant in China would undermine the price competitiveness of Hyundai and Kia cars in the United States.
Bloomberg reported on May 16 that U.S. President Donald Trump would exempt South Korean automobiles from any new U.S. tariffs.
Tianjin Mobis in China began to export its key products such as display audio devices to Huyndai and Kia plants in Europe from the beginning of this year, said sources in the automobile industry and Hyundai Mobis on May 16. Hyundai Mobis was directly hit by the 10 percent tariff that the U.S. government imposed on US$200 billion worth of goods from China last year as its the display audio devices produced at its plant in China were included in them.
In particular, the United States recently decided to increase its tariffs to 25 percent. So Hyundai Mobis diverted products made at Tianjin Mobis in China to Europe after predicting that heavier tariffs would be laid on them. Hynundai Mobis’ plant in Jincheon in Korea is responsible for shipments of parts to the United States these days. "Although Europe levies an average tariff of about 10 percent on our products, we decided to adjust our export markets as we believe that the trade disputes between the United States and China would get worse.”