Seoul, South Korea – South Korea’s Minister of Industry, Ahn Duk-geun, has warned that the country’s auto industry will face significant challenges once new U.S. import tariffs on vehicles take effect. The tariffs, announced by former U.S. President Donald Trump, impose a 25% duty on imported cars, raising concerns about declining competitiveness for South Korean automakers.
Government Prepares Emergency Measures
Minister Ahn stated that the South Korean government is preparing an emergency response plan by April to mitigate the impact. Speaking at a meeting with industry officials on Thursday, he emphasized that Seoul will actively engage with Washington to seek solutions that reduce harm to South Korean car manufacturers and parts suppliers.
“Global uncertainties are increasing, but South Korean automakers will not face this alone,” Ahn said. “The government will provide financial assistance, investment support, and help diversify export markets. Parts suppliers are likely to be hit the hardest.”
Market Reaction and Economic Impact
Following Trump’s announcement, shares in Hyundai Motor dropped more than 4%, while Kia Corp fell over 3%. Hyundai’s stock is set for its steepest daily decline since late October 2024.
Hyundai and Kia, collectively the world’s third-largest automaker by sales, heavily rely on the U.S. market. In 2024, South Korea exported $34.7 billion worth of vehicles to the U.S., making up 49% of its total auto exports.
Global Backlash Against U.S. Tariffs
The 25% tariff has drawn criticism from affected nations, with some threatening retaliatory measures. South Korea’s government is now seeking diplomatic and economic strategies to protect its auto industry from potential losses.
The situation highlights growing trade tensions and the vulnerability of export-dependent industries to sudden policy shifts in major markets.
