South Korea Sees A Decline In Auto Exports As US Tariffs Impact Shipments
South Korea witnessed a slight dip in automobile exports this April, as per data released by the Ministry of Trade, Industry and Energy. The key factor behind the decline was a significant reduction in vehicle shipments to the United States, following Washington’s enforcement of higher tariffs on imported cars.
According to the ministry’s report on Tuesday, the country’s total car export value stood at $6.53 billion last month, reflecting a 3.8 per cent drop compared to the same period last year, reported IANS.
The contraction in exports is attributed primarily to the newly implemented 25 per cent US tariff on foreign-made automobiles, a policy change that took effect on April 3 under the Donald Trump administration.
North American Market Sees Steep Declines
Regional breakdowns show that North American shipments suffered the most. Exports to the region plunged 17.8 per cent year-on-year to $3.36 billion. Within that, sales to the United States took a sharper hit, plummeting by 19.6 per cent to $2.89 billion, according to Yonhap news agency.
While the North American market faltered, other regions showed resilience. Notably, vehicle exports to the European Union jumped 26.7 per cent to $953 million. This growth was largely driven by robust demand for specific models such as Hyundai Motor Co.'s Casper Electric and Kia Corp.'s EV3, both of which have performed well in European markets.
Also read : Smart Ways To Get Better Business Loan Rates For Your Startup
Domestic Sales Strengthen on EV Demand
On the home front, car sales continued to post gains for the third straight month. April saw a 6.7 per cent rise in domestic auto sales from a year earlier. The increase was propelled by heightened consumer interest in electric and hybrid vehicles. Sales of EVs surged by 50.3 per cent year-on-year, while hybrid models recorded a 29.9 per cent increase. Together, these two segments represented 46 per cent of the 151,000 vehicles sold within South Korea last month.
Policy Response and Trade Talks Ahead
In light of the export challenges, the South Korean government is ramping up its support for the auto industry. Authorities have announced an additional liquidity injection of 2 trillion won ($1.43 billion), adding to the previously committed 13 trillion won in policy financing. Seoul also signalled plans to introduce further supportive measures. These include expanded subsidies for electric vehicle buyers, extended tax breaks on new car purchases, and strategic efforts to broaden the country’s export base beyond the US.
Meanwhile, diplomatic engagement between South Korea and the United States is set to intensify. The two nations will initiate working-level discussions later this week with the aim of reaching a comprehensive agreement by early July. These negotiations are expected to address the latest tariff measures and explore broader avenues for economic and industrial cooperation.
business