South Korea reveals $20 billion in emergency help from automakers after Trump’s tariffs
“Given that automobiles and auto parts are South Korea’s highest exports to the United States, the decision to impose a 25% tariff on these items is expected to have a major blow to our automotive industry,” the government said in a statement announcing the support measures.
Last week, Trump announced ratification and punitive tariffs on the U.S.’s largest trading partner, the worst of which came into effect on Wednesday.
The goods in South Korea are set at 25%.
Trump has also imposed huge tariffs on foreign-made cars sold in the United States, raising concerns about the global economic outlook and has led Asia’s fourth-largest economy to respond to efforts.
After industry consultation, Seoul decided to introduce “a series of industrial safety net measures centered on the most urgent requirements.” According to officials, the government also “promises on flexible action based on the level of industry losses.” South Korea’s automobile-related exports to the United States totaled $42.9 billion last year.
Under the plan, the government will expand its low-cost financing plan for the automotive industry to two trillion won ($1.34 billion).
South Korea’s largest automaker Hyundai will also work with major financial institutions to establish a one trillion won support program for domestic auto companies.
The government added that companies affected by the tariffs will be eligible for up to nine months of tax extensions.
“Highlighting the importance of the domestic market is a way to respond to the reduction in exports caused by U.S. tariffs and maintain the country’s manufacturing base,” the government said in a statement.
“To this end, the government will operate an electric vehicle subsidy system related to the manufacturer’s discount amount, from the first half of the year to the end of the year,” it said.
Seoul will also “substantially expand the government matching rate from the current 20-40% to 30-80%.
Trump spoke with South Korea’s acting president on tariffs on Tuesday.
Tariff announcements have sparked global stock markets with investors uncertainty about whether they are negotiating strategies or permanent U.S. positions.
Trump insists he won’t back down until he reduces or even eliminates the U.S. trade deficit – while saying he is ready to negotiate with countries around the world.
In 2024, the trade deficit between the United States and South Korea totaled more than US$66 billion.
