- South Korea plans to introduce financial assistance and market diversification initiatives to support its auto industry amid U.S. tariffs.
- Hyundai and Kia shares dropped significantly, with South Korea’s auto exports to the U.S. valued at $34.7 billion in 2024, making up nearly half of total exports.
- The tariffs have sparked opposition from key U.S. allies, including South Korea, Japan, and Europe, raising concerns about potential retaliatory measures and economic repercussions.
South Korea’s auto sector is expected to face “considerable difficulties” when U.S. import tariffs on cars announced by President Donald Trump take effect, and the government plans an emergency response by April, reports Reuters.
South Korea plans emergency response
Industry Minister Ahn Geun told industry officials at a meeting on Thursday that South Korea will also actively engage the U.S. government to explore measures to minimise the negative impact on South Korea’s auto companies and suppliers.
“Global uncertainties are growing but South Korean auto companies will not be fighting alone,” Ahn said. The government will consider financial assistance, investment support, and help with market diversification, Ahn said. Parts suppliers are expected to be hit particularly hard, the minister said.
Trump unveiled a 25% tariff on imported vehicles, prompting criticism and threats of retaliation from countries affected by the move.
Shares in South Korea’s Hyundai Motor (005380.KS), opens new tab shed more than 4% and sister automaker Kia Corp (000270.KS), opens new tab fell more than 3% after Trump’s announcement. Hyundai Motor shares are set to post their biggest daily drop since late Oct 2024.
Hyundai together with affiliate Kia is the world’s third-largest automaker by sales.
In 2024, South Korea’s exports of automobiles to the United States stood at $34.7 billion, accounting for 49% of its total auto exports.
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Source: Reuters
