SEOUL: South Korea has announced emergency support measures for its auto industry in response to the United States’ imposition of a 25% tariff on imported cars and light trucks, set to begin Thursday under President Donald Trump’s directive.
Key measures include:
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Increased policy financing: Raised to 15 trillion won (US$10.18 billion) for 2025, up from 13 trillion won.
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Tax cuts: Auto purchase tax reduced from 5% to 3.5% until June 2025.
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Expanded EV subsidies: Boosted to cover 30%-80% of price discounts (up from 20%-40%), extended through year-end.
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Export diversification: Efforts to support market expansion in the “Global South.”
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Negotiation with the US: Aimed at avoiding disadvantageous treatment compared to other allies.
South Korea’s auto exports to the US totalled US$34.7 billion in 2024, nearly half its global auto export volume. Automakers like Hyundai are trying to buffer the impact—pledging to maintain current US vehicle prices for at least two months, following a US$21 billion investment announcement last month.
Industry leaders welcomed the support but expressed concerns that more domestic stimulus may be needed. Analysts caution that while tariffs may be a negotiation tactic, they could raise costs—particularly in the EV segment, which relies heavily on Chinese parts.
