Shares in South Korean carmakers rose following reports the US will not apply tariffs on automotive imports from the country.
Hyundai’s stock was up as much as 5.5 per cent in early trading in Seoul on Thursday, while shares in peer Kia increased by up to 7 per cent. Hyundai Glovis and Hyundai Mobis, which manufacture car parts, were higher by as much as 4 per cent and 5 per cent, respectively.
The equity gains come on the back of reports that South Korea will be exempt from future tariffs on vehicles imported into the US, as the two countries rejigged their free trade agreement, known as Korus, last year .
President Donald Trump had earlier proposed duties of 25 per cent on imported cars and car parts on national security grounds.
The US is South Korea’s second-largest trading partner after China and vehicles are South Korea’s top export item to the US, worth $13.6bn last year. The Section 232 plan has raised fears in Seoul of big job losses, with carmakers expected to respond by shifting some production offshore.
The Financial Times reported on Wednesday that the Trump administration had also deferred a decision on imposing tariffs on autos from Japan and the EU for six months, in a move that dodges an immediate collision on trade with the pair.
Shares in Toyota were down about 1 per cent in early trading in Tokyo, while Nissan’s stock was trading flat.