Trump Signals a 'Tariff Bomb'... Crisis or Opportunity?
Auto Stocks Reel from Tariff Fears
On January 26, U.S. President Donald Trump abruptly announced that he would raise tariffs on Korean products to 25%, on the grounds that "Korea is not passing the legislation to keep its investment commitments."
On this news, the entire Korean auto sector took a big hit, with Hyundai Motor's share price plunging more than 6% intraday on the 27th.
However, brokerages (KB Securities, etc.) are instead offering the analysis that “now is a golden opportunity to buy Hyundai Motor Group shares cheaply (a buy-the-dip opportunity).” Here we summarize why, along with response strategies.
3 Reasons to See It as "Not a Crisis but an Opportunity"
① The 'TACO' Pattern: Trump Negotiates in the End
In financial markets, there is a term called ‘TACO (Trump Always Chickens Out)’.
Taken literally, it means "Trump always backs out," but in the stock market it is understood to mean “Trump makes strong threats at first, but in the end avoids a catastrophe and wraps things up through negotiation.”
The market has learned from experience that Trump's aggressive remarks are merely a 'tactic' to increase his bargaining power, and that he will not actually insist on the 25% tariff to the end and choose to hurt the U.S. economy.
② The National Assembly Is Set to Pass the 'Bill' in Question in February
What President Trump used as justification for the tariff hike is the legislative delay in Korea's National Assembly.
Fortunately, Korea's National Assembly plans to table and pass the 'Special Act on Investment in the U.S.' in February.
If this bill passes, the key justification Trump cited for raising tariffs will disappear.
In other words, this negative factor will not last long.
③ Evolving from a Simple Automaker into a 'Robot Company'
Hyundai Motor Group's corporate value (fundamentals) is stronger than ever.
That is because, going beyond simply selling cars, it is transforming into a powerhouse in the humanoid (human-shaped robot) robot market.
The strongest alliance: Hyundai Motor Group (Boston Dynamics' hardware) + Google DeepMind (artificial intelligence) + Nvidia (training chips) are working together.
In an era of labor shortages, the growth prospects of the robot industry are very bright, and this is a long-term positive far bigger than the short-term tariff issue.
KB Securities' List of Top Picks
Experts recommend a strategy of using this share price decline to buy the five Hyundai Motor Group stocks in installments. In particular, valuations related to the robot (humanoid) business are expected to be re-rated.
| Stock | Reason for Recommendation and Key Points |
|---|---|
| Hyundai Motor | Value highlighted as the holding company for the robot business and as the largest shareholder of Boston Dynamics |
| Kia | Solid electric vehicle (EV) lineup and continued strong global sales |
| Hyundai Mobis | At the center of the supply chain for electrification parts and key robot components |
| Hyundai Glovis | Benefits from logistics automation and the introduction of smart logistics systems using robots |
| Hyundai AutoEver | Serves as the group's 'brain,' including autonomous driving and robot control software |
Summary and Action Guide for Investors
- Mental management: Do not swing between joy and despair over each of Trump's social media posts and dump your stocks (panic selling). Judging by past cases, it is likely to end in a negotiated deal before any actual measures take effect.
- Buying timing: When share prices plunge on the tariff issue is actually the time for buying at the bottom (scooping up shares). If uncertainty is resolved around the National Assembly's February schedule, share prices could rebound quickly.
- Key point: Now, with auto stocks, you need to look not only at 'how many cars they sold' but also at ‘how well they are doing in the robot business.’ Remember that Hyundai Motor Group is working with global leading partners in this field.
One-line conclusion: "Trump's tariff threats are just loud noise; Hyundai Motor Group's robot future (fundamentals) has not been broken. Now is the chance to buy while it's cheap."