Full Breakdown
South Korean Firms Urge U.S. to Preserve USMCA Ahead of Review
11/25/2025, 11:07:38 PM
Importance of USMCA for South Korean Companies
As the United States prepares for a joint review of the U.S.-Mexico-Canada Agreement (USMCA) set to begin in July 2024, South Korean firms with operations in North America are advocating for the preservation and extension of the trade pact. The USMCA, which replaced the North American Free Trade Agreement (NAFTA) in 2020, is viewed as critical for ensuring policy certainty and fostering economic growth in the region.
Hyundai Motor Group (HMG) emphasized the need for early confirmation of the USMCA's extension, stating that uncertainty surrounding its renewal poses "real challenges" to long-term planning. The company indicated that a clear commitment to the agreement could unlock over $20 billion in new investments in the U.S. and enhance the region's manufacturing competitiveness. HMG described the USMCA as a "cornerstone" of its business strategy, asserting that it has provided the confidence necessary for investment, hiring, and expansion.
Perspectives from Major South Korean Corporations
Samsung Electronics Co. echoed similar sentiments, highlighting that the USMCA has been instrumental in facilitating its investments across North America and establishing an integrated regional supply chain. The company stressed the importance of maintaining a predictable and duty-free trading environment, which it believes is essential for sustaining and expanding manufacturing operations and jobs in the U.S. Samsung expressed concerns that sectoral tariffs, particularly on steel, aluminum, and semiconductors, could complicate investment planning and diminish regional competitiveness.
LG Energy Solution (LGES) also underscored the significance of the USMCA in developing an advanced battery supply chain in North America. The company operates a battery plant in Windsor, Ontario, Canada, in partnership with Stellantis. LGES urged that any potential modifications to the USMCA's rules of origin be carefully evaluated, taking into account the operational realities of the industry and the need for transitional periods to facilitate compliance with new regulations.
Official Statements & Responses
In their comments submitted to the Office of the U.S. Trade Representative (USTR), South Korean companies collectively stressed the necessity of preserving the USMCA framework to ensure North America's leadership in advanced manufacturing and economic security. They called for a clear reaffirmation of duty-free trade for USMCA-compliant products, which they believe would safeguard existing investments and support ongoing expansion in production, research, and workforce development.
Criticism & Opposition
While South Korean firms advocate for the continuation of the USMCA, there are concerns regarding the potential for the U.S. government to demand concessions from Mexico and Canada during the upcoming review. Critics argue that any significant changes to the agreement could disrupt established supply chains and hinder investment in the region.
What's Next
The USTR is expected to consider over 1,510 comments from various stakeholders, including South Korean firms, as it prepares for the formal review of the USMCA. The outcome of this review will be pivotal in determining the future of trade relations among the U.S., Mexico, and Canada, as well as the operational landscape for South Korean companies in North America.
