SEOUL (Reuters) – South Korea pledged on Monday to provide a record amount of financing support to exporters to cushion any negative impact from changes in U.S. trade policies as Donald Trump nears being sworn in for his second term.
The government plans to provide political financing worth 360 trillion won ($247.74 billion) to exporting companies through banks and state-run institutions this year, according to a statement from the Ministry of Finance.
The ministry said, “There are fears that external uncertainty will increase under the next US administration, and this will negatively affect exports.”
The ministry said it will also boost insurance support to protect against foreign exchange rate fluctuations to 1.4 trillion won this year, from 1.2 trillion won last year, and spending on government projects, such as trade fairs and delegations, to 2.9 trillion won from 2.1 trillion won. .
The ministry said that sectors particularly vulnerable to the threat of new US policies are semiconductors and rechargeable batteries, while the defense, nuclear energy and shipbuilding sectors are considered more promising due to the presence of scope for cooperation with the United States.
US President-elect Trump, who takes office later on Monday, has pledged to impose tough tariffs on major trading partners, such as Mexico, Canada and China, which are also expected to affect South Korean companies that operate factories in those countries.
Economists say there are concerns that the Trump administration will pursue trade policies against South Korea as well, after Asia's fourth-largest economy posted a record surplus of $55.7 billion in trade with the United States in 2024, up 25.4% from 2023.
The Korea International Trade Association, South Korea's largest group of exporting companies, expects export growth to slow to 1.8% this year. Last year, South Korean exports rose 8.1% to a record $683.7 billion, and sales to the United States rose 10.4%.
($1 = 1,453.1500 won)
