Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Korea to provide $2 bil. emergency fund for carmakers to help mitigate US tariff shock
Cars are parked for export at a port in Pyeongtaek, Gyeonggi Province, April 3. Yonhap
By Lee Min-hyung
Trade minister in US to negotiate tariff cut
Korea has decided to provide an emergency fund worth 3 trillion won ($2.04 billion) for the local automotive exporters to mitigate the fallout from the latest U.S. tariff imposition, the government said Wednesday.
A policy fund of 2 trillion won will be injected to support the overall car industry. The government is considering offering more financial aid in line with potential losses caused by the tariffs.
The government will also team up with private financial institutions to launch a co-prosperity program worth 1 trillion won for Hyundai Motor and Kia — two carmakers that will be hit hardest by the U.S.' 25 percent tariff on all car imports.
The ongoing trade pressure from the world’s largest economy raises calls for carmakers to offset their possible export fall by increasing domestic sales.
In response, the government decided to extend a timeline for a special incentive to electric vehicles (EVs). It introduced the program to offer EV subsidies in proportion to carmakers’ discounts on their EVs. The program was scheduled to conclude in the first half of this year but has been extended to the end of the year upon the latest decision by the government.
The government will also help carmakers expand their sales channels into more countries by widening its budget on export vouchers. It allocated 240 billion won for the program this year but decided to increase the figure by more than 100 billion won. Under the program, subsidies are provided to export-driven companies in an online voucher format.
“We have established a framework on the policy support for the car industry, and the government will remain flexible for any additional support,” a government official said.
According to data from the Korea International Trade Association, the nation’s car exports to the U.S. reached a record high of $34.7 billion in 2024, accounting for 27.1 percent of the country's total exports to the U.S.
Korea’s car exports to the country are estimated to plunge by some $6.35 billion this year, a drop of about 18 percent from the previous year, after the 25 percent tariffs are imposed, according to data from the Industrial Bank of Korea’s research center.
Trade Minister Cheong In-kyo speaks to reporters after arriving at Dulles International Airport near Washington, Tuesday (local time), to hold tariff negotiations with U.S. officials. Yonhap
Given the gravity of the situation, Korea’s Trade Minister Cheong In-kyo arrived in Washington on Tuesday (local time) to address the challenges posed by the excessive level of tariffs from the U.S. The new trade policy, in which the U.S. imposes a 25 percent "reciprocal" tariff on all goods from Korea, took effect on Wednesday.
Cheong plans to meet with U.S. Trade Representative Jamieson Greer and a group of bureaucrats from the U.S. Department of Commerce.
The minister told reporters at Dulles International Airport that he plans to bring the development of Alaskan liquefied natural gas (LNG) and cooperation in shipbuilding to the negotiation table in the upcoming negotiations.
“The Alaskan LNG project is an important matter, and shipbuilding, which is already under discussion between Korea and the U.S., is one of the areas the U.S. is most interested in," Cheong said.
“These are sectors where we have strong competitiveness and global leadership, so we will firmly place them on the negotiation table and move forward with discussions.”