Trump's auto tariffs: South Korea holds emergency meeting to discuss plans to help automakers

In a response to Trump’s 25 per cent tariffs on imported automobiles, South Korea’s top trade official on Thursday said the government will plan ways to help the country’s auto industry.

South Korea’s Industry Minister Ahn Duk-geun held an emergency meeting where he said, “It’s feared the US tariffs will cause significant difficulties for our auto companies’ US exports. We will work closely with the industry to find a way to respond, as well as with relevant agencies to announce emergency measures for the automobile industry by April.”

Stock markets across Asia and Europe skidded into the red as auto manufacturers from Toyota to Hyundai and Mercedes led the plunge.

In South Korea, Hyundai shares dipped 4.0 per cent.

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The US duties will take effect at 12:01 am (0401 GMT) on April 3 and impact foreign-made cars and light trucks. Key automobile parts will also be hit within the month.

According to the US Commerce Department’s International Trade Administration, South Korea became the third-largest exporter of automobiles to the US in the past year, with shipments valued at $36.6 billion, following Mexico and Japan.

Bloomberg Intelligence predicts that the tariffs will reduce South Korea’s GDP growth by approximately 0.1 percentage point this year and result in the loss of around 20,000 jobs.

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The retreat in the auto sector hit broader markets, which were already shaky owing to worries over Trump’s trade agenda.

Tokyo, Sydney, Seoul, Wellington, Taipei, Bangkok and Manila all fell.

London opened on the back foot along with Paris and Frankfurt.

“Within the Asia-Pacific region, the car levies will hit Japan and South Korea the hardest,” said Stefan Angrick and Dave Chia at Moody’s Analytics.

“About six percent of Japan’s total exports are cars shipped to the US. In South Korea’s case, it’s four percent. Such a sizeable tariff hike will undermine confidence, hit production and reduce orders.”

With inputs from AFP