Seoul to Infuse 3 Trillion Won in Aid to Auto Sector Affected by U.S. Tariffs
Officials announced Sunday that South Korea will allocate 3 trillion won ($2 billion) in emergency support to its automotive industry to mitigate the effects of new U.S. tariffs on vehicle imports.
TroibNews 
The South Korean government has announced an emergency support package amounting to 3 trillion won for its automotive industry in response to the impact of new U.S. tariffs on vehicle imports. This decision was made public on Sunday.
A 25 percent tariff, which was previously announced by U.S. President Donald Trump on all car imports, came into effect on Thursday, significantly affecting South Korea, where nearly half of all automotive exports go to the U.S.
The emergency funding plan is set to be approved at a ministerial meeting within the week, with oversight from state-run financial institutions, such as the Korea Development Bank, as reported by Yonhap News Agency.
"The financial support will likely amount to around 3 trillion won, though the exact figure hasn't been finalized," stated an official from the Ministry of Economy and Finance. "It will be disbursed through KDB's existing loan programs," Yonhap noted.
Automobiles represent South Korea's largest export to the U.S. However, a report from the IBK Economic Research Institute indicates that the new 25 percent tariff could reduce the country's car exports to the U.S. by 18.6 percent.
The 25 percent tariffs on vehicles, effective from April 3, are expected to be accompanied by similar tariffs on auto parts by May 3.
The South Korean automotive sector has called on the government to implement measures to support local auto parts manufacturers likely to incur significant losses due to the new U.S. tariffs. These suppliers, many of which provide components for major automakers like Hyundai and Kia, exported $8.22 billion worth of parts in 2024, according to Yonhap, which cited data from the Korea Auto Industries Cooperative Association.
In conjunction with the announcement of "reciprocal tariffs" on all trading partners, Trump also imposed a 25 percent tariff on imports from South Korea.
South Korean Prime Minister Han Duck-soo, currently acting as president following the impeachment of President Yoon Suk-yeol, asserted on Thursday that the government would employ all available strategies to address the U.S. tariff issue.
"As the global tariff war is coming to a reality, the government should pour out all of its capabilities to overcome a trade crisis," Han remarked during an emergency meeting focusing on economic security, which included ministers from various sectors such as economy, industry, and trade.
Rohan Mehta for TROIB News
A 25 percent tariff, which was previously announced by U.S. President Donald Trump on all car imports, came into effect on Thursday, significantly affecting South Korea, where nearly half of all automotive exports go to the U.S.
The emergency funding plan is set to be approved at a ministerial meeting within the week, with oversight from state-run financial institutions, such as the Korea Development Bank, as reported by Yonhap News Agency.
"The financial support will likely amount to around 3 trillion won, though the exact figure hasn't been finalized," stated an official from the Ministry of Economy and Finance. "It will be disbursed through KDB's existing loan programs," Yonhap noted.
Automobiles represent South Korea's largest export to the U.S. However, a report from the IBK Economic Research Institute indicates that the new 25 percent tariff could reduce the country's car exports to the U.S. by 18.6 percent.
The 25 percent tariffs on vehicles, effective from April 3, are expected to be accompanied by similar tariffs on auto parts by May 3.
The South Korean automotive sector has called on the government to implement measures to support local auto parts manufacturers likely to incur significant losses due to the new U.S. tariffs. These suppliers, many of which provide components for major automakers like Hyundai and Kia, exported $8.22 billion worth of parts in 2024, according to Yonhap, which cited data from the Korea Auto Industries Cooperative Association.
In conjunction with the announcement of "reciprocal tariffs" on all trading partners, Trump also imposed a 25 percent tariff on imports from South Korea.
South Korean Prime Minister Han Duck-soo, currently acting as president following the impeachment of President Yoon Suk-yeol, asserted on Thursday that the government would employ all available strategies to address the U.S. tariff issue.
"As the global tariff war is coming to a reality, the government should pour out all of its capabilities to overcome a trade crisis," Han remarked during an emergency meeting focusing on economic security, which included ministers from various sectors such as economy, industry, and trade.
Rohan Mehta for TROIB News
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