SEOUL, September 03 (AJP) - The South Korean government on Wednesday announced a sweeping 13.6 trillion won ($10.2 billion) relief package aimed at helping exporters weather U.S. tariffs, while expanding trade financing to a record 270 trillion won ($203 billion).
The measures, unveiled during a joint meeting of economic ministers and industry officials, are designed to offset the burden of recently negotiated tariffs with Washington.
Under the agreement, South Korea and the United States reduced planned mutual tariffs from 25 percent to 15 percent. Automotive tariffs were also cut to 15 percent from 25 percent, but officials warned that the new rates still weigh heavily on Korean exporters.
The plan centers on expanded access to credit and lower borrowing costs.
Korea Development Bank will raise lending limits tenfold for affected companies, lifting the cap for small businesses from 3 billion won to 30 billion won and for mid-sized firms from 5 billion won to 50 billion won. Interest rates will be reduced by an additional 0.3 percentage points from current levels of 2 to 3 percent.
The Export-Import Bank of Korea will broaden its crisis lending program to include firms with weaker credit ratings.
Targeted relief is also planned for companies in steel, aluminum, copper and related industries, which face tariffs as high as 50 percent. The government pledged 570 billion won in support, including 150 billion won in subsidized loans, with interest rate reductions of up to two percentage points for small and mid-sized firms.
Trade insurance coverage will be expanded by 14 trillion won to 270 trillion won, the largest on record, to help ensure liquidity for exporters. Fee discounts of up to 90 percent will be extended for small firms with less than $1 million in overseas sales.
Other measures include 420 billion won in tariff-related export vouchers, higher subsidies for logistics and consulting costs, and the creation of a 100 trillion won National Growth Fund to spur domestic investment.
Industry Minister Kim Jung-kwan said the plan would be rolled out quickly to help exporters adapt to shifting trade conditions. “Our goal is not only to minimize tariff damage but also to create new opportunities for Korean industry,” he said.
reporter
Candice Kim
candicekim1121@ajupress.com
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