S Korea unveils $2 billion emergency help for carmakers

SEOUL

The logo of Hyundai Motor is seen on its hydrogen fuel cell car, the all-new NEXO, during a press preview of the Seoul Mobility Show 2025 at KINTEX exhibition hall in Goyang on April 3, 2025.

South Korea on Wednesday unveiled a $2 billion emergency support package for its crucial export-focused carmakers, warning U.S. President Donald Trump's 25 percent tariffs on the sector could be a "significant blow."

"Given that automobiles and auto parts are South Korea's top exports to the U.S., the decision to impose a 25 percent tariff on these items is expected to deliver a significant blow to our auto industry," the government said in a statement announcing the support measures.

After industry consultation, Seoul has decided to introduce "a set of industrial safety net measures centred on the most urgent demands," it said.

The government has also "pledged to take flexible action depending on the level of industry damage going forward."

South Korea's auto-related exports to the U.S. totalled $42.9 billion last year.

Under the plan, the government will expand its low-cost financing program for the auto industry by two trillion won ($1.34 billion).

Hyundai Motor, South Korea's largest automaker, will also establish a one trillion won support program for domestic auto firms in partnership with major financial institutions.

Companies affected by the tariffs will be eligible for tax deferrals of up to nine months, the government added.

In 2024, the U.S. trade deficit with South Korea amounted to just over $66 billion in goods.