South Korea to Support Auto Sector with $2 Billion in Response to Tariffs

The South Korean government plans to inject 3 trillion won ($2 billion) in emergency aid into the domestic auto industry to mitigate the blow from new 25 percent US tariffs.

The new tariffs, approved by US President Donald Trump last week, are part of a broader protectionist campaign aimed at reducing the trade deficit and boosting domestic manufacturing.

South Korea is among the hardest-hit countries, with car exports to the United States accounting for nearly half of its total overseas sales.

According to Yonhap News Agency, at a ministerial meeting scheduled for this week, the government will approve the emergency financing plan, which will be implemented through state-run lending institutions, such as the Korea Development Bank.

An official from the Ministry of Economy and Finance stated, “The financial support is likely to be around 3 trillion won, although the exact figure has not yet been determined.” He added, “It will be disbursed through the Korea Development Bank’s existing loan programs.” In addition, the Korea Development Bank and other policy lenders will provide up to 248 trillion won this year as broader financial support to help companies cope with deteriorating global conditions and restructure industrial sectors.

The government also confirmed plans to establish a 50 trillion won strategic fund over the next five years to support the development of future mobility technologies in response to the growing economic uncertainty following the start of Trump’s second term.

Automobiles are South Korea’s top export to the United States. In 2024, auto exports to the United States reached $34.7 billion, representing nearly half of South Korea’s total auto exports.