The government here on Monday announced plans to provide extensive financial support to bolster exports this year, as uncertainties in the global trade environment are expected to intensify with the inauguration of US President-elect Donald Trump.
Trump is set to begin his second presidential term on Monday (US time), heightening concerns about a potential rise in global protectionism and its impact on South Korea’s export-driven economy.
“With the U.S. administration’s policy shifts and other global factors increasing external uncertainties, there are growing concerns over potential challenges for businesses in the export sector,” said Kim Dong-joon, a senior finance ministry official in charge of a government task force on exports.
The task force was launched in October, involving senior officials from the finance and industry ministries, as well as other relevant financial agencies, to assess the status of export financing and develop effective support measures.
Trump’s proposal to impose a 25 per cent tariff on all products from Mexico and Canada, and an additional 10 per cent tariff on goods from China, has raised concerns among South Korean companies.
To address anticipated challenges, the government plans to provide export financing on an unprecedented scale, amounting to 360 trillion won ($247 billion) in 2025 alone, according to the finance ministry.
Additionally, the budget for exchange rate insurance will rise from 1.2 trillion won to 1.4 trillion won in 2025 amid the weak Korean won. Funding for overseas trade fairs and trade delegations will increase from 2.1 trillion won to 2.9 trillion won.
Meanwhile, Trade Minister Cheong In-kyo said on Monday that South Korea’s exports are anticipated to experience a slowdown this month due to a reduced number of business days as a result of the Lunar New Year holiday.
Cheong made the remark in a meeting with government officials after the government designated next Monday as a temporary national holiday, extending the holiday season to six days until next Thursday.
The designation reduced the number of business days in January by four from a year earlier, when the Lunar New Year holiday fell in February.
“As there is also a decrease in demand from major Asian trade partners who are observing holidays as well, exports are expected to experience a temporary slowdown in January,” Cheong said.
