[Source/Observer Network by Pan Yuchen, Liu Huaizheng, edited by Gao Shen] According to Yonhap News Agency on April 6th, in order to mitigate the impact brought by Trump's new tariff policy, the South Korean government decided to invest approximately 3 trillion Korean won (about 15 billion RMB) of emergency financial support into the automobile industry.
On March 26th, Trump announced a new tariff of 25% on imported cars and car parts into the United States, which took effect on April 2nd. The tax on auto parts will begin in May.
Yonhap News Agency reported that the South Korean government plans to convene a meeting of relevant department heads this week, intending to provide emergency financial assistance to automobile-related enterprises through policy-oriented financial institutions such as the Industrial Bank. A related person from the Ministry of Strategy and Finance stated that the aid scale is temporarily set at 3 trillion Korean won, but it has not been finally determined and still has the possibility of further expansion.
In addition, the South Korean government also plans to establish a "high-tech strategic industry fund" with a total scale of 50 trillion Korean won (approximately 250 billion RMB) through the Industrial Bank, focusing on supporting core export industries such as future-type automobiles over the next five years.
Exporting cars waiting to be shipped in Pyeongtaek Port, Gyeonggi Province, Yonhap News Agency
Yonhap News Agency reported that South Korea is one of the countries most severely affected by this tariff. Cars are South Korea's largest export category to the US, with exports reaching 34.74 billion USD (approximately 252.8 billion RMB) in 2024, accounting for 49.1% of total car exports.
According to statistics, in 2024, Hyundai and Kia Motors sold a total of 1.77 million vehicles in the United States, of which 630,000 were produced domestically in the US, 140,000 were produced in Mexican factories, and the remaining approximately 1 million were directly exported from South Korea to the US. South Korea has become the second-largest supplier of imported cars to the US market, just after Mexico.
Yonhap News Agency cited analysts' warnings that Trump's new tariff policy will significantly affect South Korea's economy, causing a substantial increase in the price of South Korean cars in the US market. A report released by the IBK Economic Research Institute estimated that Trump's policy of imposing a 25% tariff on imported cars would reduce South Korea's car exports to the US by 18.6%.
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