SEOUL (Reuters) - Hyundai Motor Co’s (005380.KS) South Korean labor union on Tuesday called Seoul’s revised free trade deal with the United States “humiliating”, and said the extended tariffs on pick-up trucks mean a missed opportunity to tap into the U.S. market.
The United States and South Korea agreed to revise a trade pact sharply criticized by U.S. President Donald Trump, Seoul said on Monday, with the nations agreeing to extend U.S. tariffs on Korean pickup trucks by 20 years until 2041.
“The union has called for domestic (South Korean) production of pickup trucks for the past several years,” the union said in a statement, adding it believes the U.S. pickup truck market “represents the U.S. market’s blue ocean and the future bread and butter of the South Korean auto industry”.
Although no South Korean automakers currently export pickup trucks to the United States, Hyundai Motor had said last year it planned to launch a model there to catch up with a shift away from sedans.
The government’s agreement to revise the U.S.-Korea Free Trade Agreement’s auto industry section “is a humiliating negotiation that accepted Trump’s ‘strategy to preemptively block Korean pickup trucks’”, the union said.
Hyundai was the worst performer among major automakers in the United States as of February, with its sales down 12 percent year-on-year over the first two months of this year due to its heavy reliance on sedans and its aging SUV models. This compares to the market’s 0.8 percent drop over the period.
“Among potential offerings from (Korean) automakers in the U.S. market, Hyundai Motor’s pickup truck is likely to be made locally (in the U.S.),” Yoo Ji-woong, analyst at eBest Investment & Securities, wrote in a note on Tuesday.
Hyundai Motor said on Monday it was “too early to elaborate on the details such as the estimated timing of the model release and production location”.
Reporting by Joyce Lee; Additional reporting by Hyunjoo Jin; Editing by Himani Sarkar