South Korea Allocates $182 Million to Support Auto Parts Manufacturers Amid US Tariff Concerns
Government Support for Auto Parts Sector
The South Korean government has announced a plan to offer 250 billion won (approximately $182.4 million) in low-interest loans to small and medium-sized auto parts manufacturers throughout the state by the end of next year. This initiative aims to help these businesses cope with the adverse effects of high tariffs imposed by the United States, as reported by a local news outlet.
According to the Ministry of Trade, Industry and Energy, manufacturers that have exported environmentally friendly vehicles since 2024 can apply for this loan program. Each company is eligible for financial assistance of up to 500 million won.
This measure is part of a broader governmental strategy to support industries facing trade challenges due to tariffs on automobiles, auto parts, steel, and other imports introduced by the Trump administration. In total, South Korea plans to allocate 28.6 trillion won in emergency funds and financial aid to bolster its exporting sectors.
Impact of Tariffs on Exports
In April 2025, South Korea experienced a decline in automobile exports compared to the previous year, primarily due to a significant reduction in shipments to the United States following the implementation of steep tariffs on foreign vehicles. Exports to North America fell by 17.8%, totaling $3.36 billion in April 2025, compared to the same month in 2024. Shipments to the US alone dropped by 19.6%, amounting to $2.89 billion.
A survey referenced by the news outlet indicates that if President Trump continues with his current tariff policies, South Korean exporters could face a 4.9% decrease in exports year-on-year in 2025.
Conducted by Mono Research and commissioned by the Federation of Korean Industries, the survey highlights that the electronics sector is expected to be the hardest hit, with an anticipated decline of 8.3%. The automobile and parts sector is projected to see a 7.9% drop, followed by petroleum products at 7.2%, general machinery at 6.4%, semiconductors at 3.6%, and steel at 2.8%.