South Korea automobile industry is bracing for a major setback following U.S. President Donald Trump’s decision to impose a 25% import tariff on foreign cars. The government, led by Industry Minister Ahn Duk-geun is moving swiftly to mitigate the fallout, with emergency response plans expected by April.
With $34.7 billion in vehicle exports to the U.S. in 2024, South Korea’s auto sector relies heavily on American markets. The new tariffs pose a severe threat to companies like Hyundai and Kia, as well as the thousands of parts suppliers supporting the industry.
Minister Ahn emphasized that the government will engage with U.S. officials to reduce the financial strain on South Korean manufacturers. Additionally, Seoul is considering financial assistance and market diversification strategies to soften the impact.
Stock Prices Drop as Uncertainty Looms
Following the announcement, shares of Hyundai Motor and Kia Corp saw sharp declines, reflecting investor concerns over potential losses. Experts warn that higher costs for U.S. consumers could weaken demand for South Korean vehicles, further damaging the industry.
In response, the government is exploring new export opportunities in regions such as Southeast Asia and Europe. Officials are also evaluating trade agreements that could offset losses from the U.S. market downturn.
With negotiations pending and countermeasures in progress, South Korea’s auto sector faces a critical period that could shape its future competitiveness on the global stage.