South Korea is taking emergency measures to support its auto industry, trying to mitigate the possible adverse effects of tariffs imposed by US President Donald Trump. In recent years, Korean car exports to the United States have increased significantly, AP news writes.
The government will provide financial support, tax breaks, and subsidies to stimulate domestic demand. Korea will also try to negotiate with the United States and support the opening of new markets.
“Since South Korean automakers produce relatively little in the United States, our industry is more vulnerable to tariffs,” the government statement said.
According to the government, the tariffs could cause “significant” damage to Korean companies producing cars and spare parts.
South Korea will reduce car purchase tax from 5 percent to 3.5 percent by June 2025. Subsidies for electric vehicles will also increase from 20-40 percent to 30-80 percent, and their terms will be extended.
Regarding the US tariffs, the government said: “We will do our utmost to ensure, through negotiations and bilateral cooperation, that the US applies the same conditions to South Korea as to other allies.”
