South Korean auto shares recover after Trump threatens higher tariffs tied to stalled trade deal

SEOUL — Shares of South Korea’s major automakers swung sharply on January 27, 2026 after President Donald Trump said in a social media post that he would raise tariffs on South Korean goods, including autos, to 25% from 15%. Investors initially sold Hyundai Motor, Kia and Hyundai Mobis, but the stocks clawed back losses as traders weighed how quickly — or whether — the tariff threat would translate into a formal policy change.

A fast selloff, then a reversal

Hyundai Motor shares fell as much as 4.8% in early trading before rebounding to a modest gain. Kia, after dropping as much as 6%, narrowed its decline, and Hyundai Mobis also pared losses. The broader KOSPI index remained higher, signaling that markets were not uniformly pricing in an immediate trade shock.

Currency markets reacted too: the won weakened at the open, giving back part of a recent strengthening move. That combination — equity volatility and a softer currency — highlighted how sensitive Seoul’s markets remain to U.S. trade rhetoric, especially when the products named include autos, one of South Korea’s flagship export categories.

Trade deal politics drive uncertainty

Trump argued that the tariff increase was justified because South Korea’s legislature has not enacted a trade agreement previously reached with Washington. The situation leaves businesses and investors facing a familiar problem: the message is clear, but the mechanics are not. It was not immediately known when any tariff increase would take effect or what steps would be required to implement it.

Some analysts suggested that negotiations may already be effectively settled at the leadership level, making the threat more likely to become a bargaining lever than an automatic escalation. Even so, the episode adds a fresh layer of planning difficulty for exporters and suppliers, especially those making production and pricing decisions for the U.S. market.

Why the market reaction matters

For South Korean automakers, the U.S. is a critical market, and tariff uncertainty can influence everything from shipment timing to marketing budgets and investment plans. The quick rebound in shares suggests investors are cautious about assuming immediate enforcement. But the initial slump shows how quickly sentiment can turn when tariff levels and specific sectors are named.