South Korea has announced a 3 trillion won ($2 billion) emergency support package for its automotive industry following the implementation of new U.S. tariffs on vehicle imports. The tariffs, introduced by U.S. authorities last week, pose significant challenges to one of Asia's most export-dependent economies.
The 25% levy on automobiles took effect on April 3, with similar duties on auto parts expected by May. South Korea's Ministry of Economy and Finance confirmed the funds will be deployed through state-backed lenders like the Korea Development Bank to stabilize production lines and protect jobs.
Vehicle exports to the U.S. account for nearly 50% of South Korea's overseas car sales, with industry analysts predicting an 18.6% drop in shipments under the new tariff regime. Hyundai, Kia, and their network of parts suppliers—who exported $8.22 billion in components last year—are particularly vulnerable.
Prime Minister Han Duck-soo emphasized urgency during an emergency economic strategy meeting: "We must mobilize all available measures to overcome this trade crisis." The funding package aims to help manufacturers diversify exports while supporting small-to-midsize suppliers facing liquidity challenges.
This development highlights growing trade tensions in Asia-Pacific markets, with business leaders and policymakers closely monitoring potential ripple effects across regional supply chains. Automotive industry representatives continue advocating for long-term solutions to mitigate protectionist measures.
