Daijiworld Media Network - Seoul
Seoul, Apr 6: The South Korean government is preparing to roll out an emergency aid package worth 3 trillion won (approximately $2 billion) to support its car industry, which has been hit hard by newly imposed 25 percent US tariffs, officials announced on Sunday.
The move comes in response to US President Donald Trump’s latest protectionist policy aimed at reducing trade deficits and bolstering American manufacturing. South Korea, whose automobile exports to the US account for nearly half of its total vehicle shipments, stands among the countries most affected.
At a high-level ministerial meeting set for this week, the emergency financing plan will be formally approved. The funds will be distributed through state-run financial institutions, particularly the Korea Development Bank (KDB).
"The financial support will likely amount to around 3 trillion won, though the exact figure hasn't been finalised," an official from the Ministry of Economy and Finance said. "It will be disbursed through KDB's existing loan programs."
In addition to this emergency relief, the government has outlined broader measures to mitigate the fallout from global trade shifts. Policy lenders including KDB are set to provide up to 248 trillion won in financial support this year to assist industries facing restructuring and economic headwinds.
The administration also announced plans to launch a 50 trillion-won strategic fund over the next five years to drive innovation in future mobility technologies, a key area for the country’s long-term competitiveness in the global automotive market.
On Monday, the Financial Services Commission will convene a meeting with senior executives from leading commercial and state-run banks to encourage coordinated support for the auto sector.
Cars remain South Korea’s leading export to the United States. In 2024 alone, auto shipments to the US reached $34.7 billion nearly half of all Korean car exports.
However, analysts warn the new US tariffs could inflict significant damage on the country’s auto industry. A report from the IBK Economic Research Institute estimates that South Korea’s car exports to the US may drop by 18.6 percent under the new tariff regime.
Industry insiders are urging swift government action and strategic adjustments by automakers to protect market share and maintain competitiveness in the face of rising trade barriers.