South Korea unveils $2 billion in aid for tariff-hit auto sector
South Korea unveiled a package of emergency funding worth 3 trillion won ($2 billion) for its automobile industry to soften the blow from US President Donald Trump’s tariffs..The package will increase the low-cost financing made available to the industry by state-run lenders and agencies by about 15 per cent to 15 trillion won. Under the plan released on Wednesday, Hyundai Motor Co. and its affiliate Kia Corp will form a 1 trillion won financing program with financial institutions and credit guarantee funds to facilitate auto-parts makers’ bond issuance and borrowing..Japan, China, South Korea meet as US tariff pressure rises.The government will also extend EV purchase subsidies to the end of the year to boost demand and designate self-driving technology as a national strategic technology with tax incentives..The 25 per cent levy on all auto imports into the US took effect last week and the new duties are expected to have a significant impact on the industry, the South Korean government said in a statement. It presents a real threat to South Korean automakers since the US accounted for nearly half of the nation’s $70.8 billion worth of vehicle exports in 2024, according to government data. Automobiles and auto-parts are among South Korea’s biggest export items to the US..South Korea ranks as the third-biggest vehicle exporter to the US, behind Mexico and Japan, according to the US Commerce Department’s International Trade Administration. Bloomberg Intelligence estimates the levies will slice about 0.1 percentage point from South Korea’s pace of GDP growth..South Korea”s Kia denies responsibility for anti-Musk ad.Trump had praised Hyundai’s commitment to invest a record $21 billion in the US over the next four years, but that didn’t spare South Korea from the president’s sweeping tax campaign..The Trump administration has also imposed an additional 25 per cent duty on all South Korean exports, making the export-driven economy even more vulnerable. The government has dispatched Trade Minister Cheong Inkyo to Washington to negotiate a lower rate..It’s unclear whether the White House will entertain any such lobbying efforts, but Trump said Tuesday that prospects for a trade deal with South Korea were “looking good” after a phone conversation with acting President Han Duck-soo.
Source: Bloomberg