South Korean Car Exports Hit by US Tariffs, EU Demand Soars

In a significant downturn, South Korea's automobile exports plummeted in April, compared to the previous year, primarily due to the imposition of hefty US tariffs on foreign vehicles, according to the Korean Herald citing government statistics. The Ministry of Trade, Industry, and Energy reported that the value of car exports dropped by 3.8% to USD 6.53 billion.

Exports to North America suffered a notable decline of 17.8%, reaching USD 3.36 billion in April 2025, compared to a year earlier. Shipments to the US specifically witnessed a steep drop of 19.6%, amounting to USD 2.89 billion. Despite these setbacks, South Korea's automotive sector is experiencing robust growth, both domestically and on international fronts.

Exports to the European Union (EU) surged by 26.7% in April, amounting to USD 953 million, fueled by the popularity of electric models such as Kia's EV3 and Hyundai's Casper Electric, reported the Korean Herald. Domestically, car sales saw a steady increase for the third consecutive month, climbing by 6.7% compared to the previous year. Electric and hybrid vehicles continue to be in high demand, with EV sales soaring over 50% and hybrids nearly 30%, accounting for 46% of the total 151,000 cars sold last month.

However, the industry remains wary of a newly implemented 25% US import tax announced on April 3, an initiative from former President Donald Trump's administration. To bolster the sector, the South Korean government has unveiled plans to inject an additional 2 trillion won (USD 1.43 billion) into the industry, supplementing the previously committed 13 trillion won in policy financing. Meanwhile, South Korea and the US intend to commence detailed discussions this week, aiming for a comprehensive agreement by early July, concentrating on new tariffs and cooperative economic and industrial strategies.

Moreover, South Korea is dedicated to fortifying its domestic automotive industry, promising initiatives like subsidies for electric vehicle purchases, extended tax benefits for new vehicle buyers, and exploring diversified export markets to mitigate tariff impacts. (ANI)

(With inputs from agencies.)