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South Korea's Hyundai says U.S. car tariffs would harm security ties over North Korea

FILE PHOTO - Hyundai vehicles are lined up in the company's presentation area during the North American International Auto Show in Detroit, Michigan, U.S., January 10, 2017. REUTERS/Mark Blinch/File Photo

SEOUL (Reuters) - Hyundai Motor cautioned the U.S. administration that imposing up to 25 percent tariffs on imported vehicles from South Korea would hurt a security alliance between the two countries over North Korea's nuclear ambitions.

The tariffs would hike production costs at Hyundai's U.S. factory by about 10 percent and "jeopardize" its U.S. investment plan, the top South Korean automaker said, echoing sentiments of other global carmakers such as BMW (BMWG.DE).

The United States in May launched an investigation into whether imported vehicles pose a national security threat and President Donald Trump has repeatedly threatened to quickly impose tariffs.

The tariffs "would be devastating to Hyundai Motor", Hyundai said in comments to the U.S. Department of Commerce late on Friday, according to a post on a U.S. government website.

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Hyundai also said auto trade restrictions "would severely weaken Korea's economy and therefore its ability to advance shared U.S.-Korea security interests in the region".

"Although the recent summit between the leadership of the United States and North Korea has decreased tensions in the region, it is still critical for the United States and Korea to act in unison in order to resolve the nuclear issue," it said.

The auto sector accounted for 13 percent of total exports by South Korea, Asia's fourth-biggest economy, in 2016.

Hyundai produces in the United States almost half of its vehicles sold in the country, while affiliate Kia makes in the United States about a third of its cars sold there.

Hyundai said its products are heavily focused on sedans, meaning its imports do not pose a threat to U.S. automakers that concentrate more on large SUVs and pickups.

It also said Seoul has agreed in principle to revise a bilateral trade deal with Washington, addressing a U.S. auto trade deficit with South Korea.

"Given these outcomes, which are unique among major automotive exporting nations, Korean automobile and auto part imports cannot be a threat to the U.S. economy or national security," Hyundai said in the comments.

(Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Himani Sarkar)