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Iraqi News
06-04-2025
- Business
- Iraqi News
S. Korea plans $2 bn emergency aid for auto sector hit by U.S. tariffs
INA-sources ASouth Korea plans to offer emergency policy financing worth 3 trillion (about $2 billion) to support its automobile industry, which has been dealt a major blow by the United States' recent imposition of a 25% tariff on imported vehicles. According to financial industry sources, the S. Korean government is preparing policy financing measures in anticipation of the difficulties facing the domestic auto sector due to the U.S. tariffs on Korean car exports. A senior financial official said the government is coordinating with related ministries to draw up support measures, noting, 'We are taking this situation very seriously, given its impact on our GDP. We will need to mobilize all available resources.' Authorities are expected to expand existing programs offered through policy lenders such as the Korea Development Bank (KDB). This year, policy institutions including KDB, the Industrial Bank of Korea, Korea Credit Guarantee Fund, and the Korea Technology Finance Corporation (Kibo) have committed to supplying a total of about $170 billion, to help companies cope with worsening global conditions and restructure legacy industries. Up to 60% of this funding will be disbursed in the first half of the year, with an additional $6.8 billion already front-loaded compared to previous years. Separately, the government has confirmed plans to establish a new fund of up to $34.2 billion over five years to support future mobility industries such as electric vehicles, in response to heightened external uncertainties under the second Trump administration. The Korea Development Bank is set to oversee the fund, which the government aims to start disbursing later this year, pending parliamentary approval of an amendment to the KDB Act and related guarantees. Lawmakers from both the ruling and opposition parties are backing a joint proposal to expedite the process. The Financial Services Commission also plans to convene a financial status meeting on Apr. 7, calling together the heads of the country's five major financial holding companies. Financial Services Commission Chairperson Kim Byoung-hwan and Financial Supervisory Service Governor Lee Bok-hyun will meet with executives from the five financial groups, as well as representatives from the Korea Federation of Banks, Korea Financial Investment Association, Korea Development Bank, IBK, Korea Credit Guarantee Fund, Korea Deposit Insurance Corporation, Korea Exchange, and Korea Securities Finance Corporation. Kim is expected to review the liquidity status of companies most affected by the tariffs and urge financial institutions to maintain steady credit flows. The financial authorities currently estimate total financial sector exposure to the auto industry—including loans and market-based borrowing—at around $34.2 billion. On Mar. 26, U.S. President Donald Trump signed an executive order to impose a 25% tariff on all vehicles not manufactured in the United States. The move poses a significant threat to S. Korea's automobile exports, its top export category to the U.S. In 2024, S. Korea shipped $34.74 billion worth of vehicles to the U.S., which accounted for 49.1% of its total auto exports of $70.79 billion. In a recent report, the IBK Economic Research Institute projected that if the 25% tariff is implemented, S. Korea's auto exports to the U.S. could fall by as much as 18.6% this year compared to 2024. source: The CHOSUN Daily
Korea Herald
04-04-2025
- Business
- Korea Herald
Hana financial unveils W6.3tr relief plan for SMEs after US tariffs
South Korean financial service providers are scrambling to respond to the 'reciprocal" tariffs announced by US President Donald Trump on Wednesday. Hana Financial Group, one of the country's top four financial groups, has pledged 6.3 trillion won ($4.38 billion) in support of the small and medium-sized enterprises expected to be hit the hardest by the US tariff measures. The support package aims to assist SMEs and small merchants amid growing concerns that volatility in financial and foreign exchange markets will continue following the US decision to impose tariffs on all imports, the group explained Thursday. Hana Bank, the group's main lending arm, will allocate 6 trillion won to help provide liquidity to SMEs. The bank plans to offer financial support to businesses facing liquidity shortages due to the new tariff policy, including interest rate reductions and loan maturity extensions. Additionally, the bank will set aside 24 billion won to support auto parts businesses — one of the sectors expected to suffer the most under the new tariffs — through a partnership with the Korea Credit Guarantee Fund later this month. To further aid exporters, Hana Bank will consider delaying credit rating downgrades for businesses impacted by the tariffs and exempting them from existing trade financing limits. For small merchants, the bank has allocated 300 billion won in new loans, which will be offered at preferential interest rates. Hana Financial Group Chair Ham Young-joo stated, 'We will expand financial support to help SMEs and small merchants that are expected to struggle with the US' imposition of 'reciprocal tariffs.'' Meanwhile, other major financial institutions are also preparing responses to the trade policy shift. Shinhan Financial Group will hold an emergency meeting convened by Chair Jin Ok-dong on Friday afternoon to address increased market volatility. Its affiliates, including Shinhan Bank and Shinhan Card, are set to hold separate strategy sessions. KB Financial Group likewise plans to hold an executive meeting with Chair Yang Jong-hee in attendance.
