South Korea warned US President Donald Trump’s 25 % tariffs on the sector could be a” significant blow” when it announced a$ 2 billion emergency support package for its crucial export-focused automakers on Wednesday.
The government said in a statement announcing the support measures that” the decision to impose a 25 % tariff on these items is expected to be a significant blow to our auto industry” given that “autos and auto parts are South Korea’s top exports to the US.”
Trump announced extensive and harsh tariffs against the world’s largest trading partners last week, with the most significant tariffs set to go into effect on Wednesday.
North Korean items will be subject to a 25 % tax rate.
Trump also imposed severe tariffs on imported vehicles in the United States, raising questions about the state of the world economy and causing panic in Asia’s fourth-largest market.
Seoul has decided to implement” a set of business safety net measures centered on the most serious needs,” according to Seoul’s announcement after business conversation.
Additionally, the government “has pledged to take versatile action in response to the anticipated impact of business damage.”
According to officials, South Korea exported$ 42.9 billion worth of auto-related goods to the US next year.
The government will increase its low-cost financing program for the auto industry by two trillion won ($ 1.34 billion USD ) under the proposed plan.
The largest automaker in South Korea, Hyundai Motor, may also create a one trillion won assistance program in partnership with major financial institutions.
According to the government, businesses that are affected by the taxes may be eligible for tax delay lasting up to nine weeks.
According to the govt,” the importance of the local market is being highlighted in order to address the country’s manufacturing base and reduce the export volumes resulting from US tariffs.”
The government may operate an electric car payment system linked to companies ‘ cheap amounts from the first quarter of this year through the close of the year, it said.
Seoul will even” significantly increase the state matching support ratio from the latest 20-40 percent to 30-80 percent.”
Trump spoke with the operating president of South Korea on Tuesday regarding taxes.
Investors are unsure whether the tariffs are a negotiating tactic or a continuous US status as a result of the announcement.
Trump has vowed to stand by him until he has reduced or even completely eliminated US trade imbalances while also indicating that he is willing to negotiate with nations all over the world.
The US trade deficit with South Korea reached only over$ 66 billion in goods in 2024.
