Seoul: In anticipation of potential shifts in U.S. trade policies under Donald Trump’s second presidency, South Korea has committed to a record level of financial support for its exporters. On Monday, the government announced plans to provide an unprecedented 360 trillion won ($247.74 billion) in policy financing to export-oriented companies through state-run banks and institutions for the year.
The South Korean finance ministry expressed concerns about the possibility of increased external uncertainties under the incoming U.S. administration and their potential adverse effects on exports. “There are concerns that external uncertainty will be heightened under the incoming U.S. administration and adversely affect exports,” the ministry stated.
To address these challenges, the government is also increasing its insurance support for foreign exchange volatility to 1.4 trillion won this year, up from 1.2 trillion won in 2024. Additionally, funding for government projects such as trade fairs and delegations will rise to 2.9 trillion won from 2.1 trillion won.
Key sectors vulnerable to potential changes in U.S. trade policies include semiconductors and rechargeable batteries. However, the ministry also noted that sectors such as defense, nuclear energy, and shipbuilding are seen as more promising, offering more opportunities for cooperation with the United States.
Also Read | UK Lawmakers Question the Impact of Rachel Reeves’ Office for Value for Money
As U.S. President-elect Donald Trump prepares to take office, he has promised to impose steep tariffs on major trading partners, including Mexico, Canada, and China. This is expected to have a direct impact on South Korean companies operating in these countries.
Also Read | Hamas and Israel Mark Ceasefire with Hostage Releases and Prisoner Exchange
Economists are particularly concerned that the Trump administration may introduce trade policies unfavorable to South Korea. In 2024, South Korea posted a record-high trade surplus of $55.7 billion with the U.S., a 25.4% increase from the previous year. The Korea International Trade Association (KITA) has projected a slowdown in export growth to 1.8% this year, following an 8.1% increase in exports last year, which reached a record $683.7 billion. Exports to the U.S. rose by 10.4%, contributing significantly to this record performance.
