Seoul: The South Korean government unveiled a comprehensive support package on Wednesday, allocating over 2 trillion won (US$1.5 billion) in policy financing to domestic industries impacted by the recent U.S. tariff impositions. The finance ministry announced the measures, which focus on minimizing the adverse effects on local industries due to the evolving trade environment.
According to Yonhap News Agency, the measures were presented during a meeting chaired by Finance Minister Choi Sang-mok. The meeting aimed to explore strategies for mitigating potential damage to key export sectors, such as automobile, steel, semiconductor, and battery, which are deemed most susceptible to trade frictions.
The government plans to introduce special policy finance programs tailored to support the industries most affected, with a particular emphasis on the automotive and parts sectors. To further assist businesses, the state-run Export-Import Bank of Korea and the Industrial Bank of Korea will roll out emergency loan programs.
In response to liquidity challenges faced by companies, the government will launch a "crisis response special guarantee" program and expand emergency management stabilization funds for small and medium-sized enterprises (SMEs) impacted by tariff-related issues. Additional measures under consideration include expanding subsidies for electric vehicles and providing support for consumption tax adjustments on passenger cars.
The recent imposition of a 25 percent reciprocal tariff on South Korean goods by U.S. President Donald Trump, set to take effect on Wednesday (U.S. time), forms part of a broader protectionist agenda aimed at reducing trade deficits and promoting domestic manufacturing. The U.S. is also reportedly planning to impose tariffs on semiconductor and pharmaceutical imports, following recent duties on steel, aluminum, and auto imports.
In anticipation of these challenges, the South Korean government is accelerating efforts to diversify export destinations through increased export promotion events. The government will inject 60 billion won in policy funds to support the overseas operations of SMEs and raise the export voucher limit for logistics costs from 30 million won to 40 million won, according to the ministry.
Additional support measures include introducing low-interest financing programs for companies targeting promising markets, expanding low-interest market entry funds, and increasing special guarantees for businesses seeking to establish new export channels.