**Analysis by US media such as CNN and NYT: “Impact more significant than tariffs on imported finished cars”**
Industry experts suggest that “the cost of vehicle maintenance and insurance will rise, affecting all Americans.”
(Los Angeles = Yonhap News) Correspondent Mina Lim reports: With the 25% tariff imposed by US President Donald Trump on foreign automobile parts officially taking effect on the 3rd (local time), US media and experts predict that the impact of these parts tariffs will be greater than that of tariffs on imported finished vehicles.
Previously, a 25% tariff on imported foreign cars to the US has been in effect since the 3rd of last month. The addition of a 25% tariff on imported parts is expected to further extend the impact on the US automotive industry and consumers.
CNN suggested that these parts tariffs “can change the automobile industry forever” and “could shake the industry more than existing import car tariffs.”
Jonathan Smoke, the chief economist at automotive market research firm Cox Automotive, stated, “Frankly, the impact of parts tariffs on the economy seems worse than that of import car tariffs.”
CNN noted that out of the 10 million vehicles produced in the US last year, none were made without imported parts.
Additionally, parts from suppliers in Canada or Mexico that hire workers earning over $16 per hour are classified as compliant with the United States-Mexico-Canada Agreement (USMCA), exempting them from tariffs. However, according to CNN, while most Canadian parts are exempt, very few Mexican parts meet this exemption.
Mexico, the largest supplier of US car parts, exported $82.5 billion (approximately 116 trillion won) worth of parts to the US last year, and most of these did not comply with ‘USMCA compliance,’ thus facing tariffs, CNN explained.
Even considering the Trump administration’s decision to refund part of the tariff cost for cars assembled in the US, the additional cost due to these tariffs will average about $4,000 (approximately 561,000 won) per vehicle, according to CNN’s estimates.
In reality, GM CEO Mary Barra estimated in a CNN interview on the 1st that the tariffs would cost the company $4-5 billion (approximately 5.6-7 trillion won) this year due to its high parts import ratio.
While automakers like GM, Ford, and Hyundai have pledged for months not to raise vehicle prices in the US, the NYT pointed out that they are not profitable enough to indefinitely absorb the costs from tariffs.
The NYT predicted that tariffs could particularly reduce the supply of low-priced vehicles.
According to Cox Automotive, nearly 80% of vehicles priced below $30,000 (approximately 4.2 million won) in the US are subject to tariffs, including popular models like the Honda Civic, Toyota Corolla, and Chevrolet Trax.
US media also suggest that the impact of these tariffs could raise the prices of not only new cars but also used cars, repair costs, and insurance premiums.
Smoke from Cox Automotive warned, “Parts tariffs will lead to inflation in repair, maintenance, and insurance costs, affecting not just those looking to purchase new import cars but all Americans.”