South Korea to Expand Support for Tariff-Hit Auto Industry

By Jihye Lee

South Korea plans to expand policy support for its auto industry in the wake of a trade deal struck between Seoul and Washington.

The export-dependent economy is planning more than 15 trillion South Korean won, equivalent to $10.2 billion, of support measures for domestic manufacturers of cars and car parts. These include new loan programs and tariff quotas for raw materials used in manufacturing, the prime minister's office said Friday.

South Korea and the U.S. in late October agreed on a reduced 15% levy on the Korean auto sector.

The trade deal is "expected to lead to less uncertainty regarding the U.S. market, but significant challenges remain," Prime Minister Kim Min Seok's office said in a statement.

The auto sector faces challenges such as competition in autonomous-driving technology and the need to diversify its overseas markets, the prime minister's office said.

"Even with the reduction of tariffs to 15%, there are concerns that this will still place a burden on export companies," the office said.

Additionally, the government plans to raise its subsidy program for electric vehicles to 9.36 trillion won from 7.15 trillion won. Authorities will also introduce a new financing program to support transportation companies that purchase electric and hydrogen buses.

The South Korean government also plans to set up a 50 billion won fund to promote domestic investment in next-generation vehicles aimed at "supporting strategic overseas expansion and overcoming global protectionism," the office said.

Write to Jihye Lee at jihye.lee@wsj.com

(END) Dow Jones Newswires

November 13, 2025 22:41 ET (03:41 GMT)