The government is fully reforming the Trade Committee in preparation for the inauguration of Trump's second term and the expansion of the U.S.-China trade war. This is to preemptively block the dumping of low-priced products from China, which has lost its market.
To maintain the record export flow achieved last year, policy support will also be expanded. To alleviate the burden on corporations due to increasing trade uncertainty and exchange rate volatility, the exchange rate fluctuation insurance rate will be specially discounted by 30%, and the loan guarantee limit for small and medium-sized enterprises with significantly increased raw material import burdens will be increased to 150%.
Choi Nam-ho, the second vice minister of the Ministry of Trade, Industry and Energy, reported this work plan during the '2025 Economic Key Issues Resolution Meeting' held at the Government Seoul Office on the 8th. The meeting, chaired by Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok, focused on 'crisis response' and discussed practical solutions.
△ Response to rapidly changing trade environment… full reform of the Trade Committee
In preparation for the re-election of U.S. President Donald Trump, the Ministry of Trade is establishing a trade response system at the 'International Economic Issues Meeting,' reviewing response strategies by situation and issue. Public and private sectors will share roles and also deploy strategic outreach to the U.S.
If President Trump implements the universal tariff commitment, exports are expected to be significantly affected. There are also concerns about losses for domestic corporations that have invested in the U.S. if subsidies under the U.S. Inflation Reduction Act (IRA) or CHIPS Act are reduced or eliminated.
While managing crises, opportunity factors will be actively sought. For the shipbuilding sector, where President Trump has expressed a willingness to cooperate, a cross-ministerial task force will be established, and a 'Korea-U.S. shipbuilding cooperation package' will be pursued.
To prevent low-priced Chinese imports from flooding the domestic market due to U.S.-China conflicts, the Trade Committee's workforce and role will be expanded. It will enhance trade remedy capabilities by refining anti-dumping investigation techniques and implementing measures to prevent circumvention of dumping. Additionally, the Trade Association's legal support function for major industry associations will also be reinforced.
Active moves will also be made to respond to import regulations for small and medium-sized enterprises. Particularly, recognizing that competition in third-country markets may intensify, plans are set to accelerate the signing of new trade agreements with Malaysia, Thailand, and Mongolia.
△ Maintaining record exports and foreign investments… focused budget support in the first half
To tackle the anticipated 'low in the first half and recovery in the second half' economic trend this year, the Ministry of Trade has decided to concentrate available policy resources in the first half. In particular, the export voucher budget for small and medium-sized enterprises will be supported by more than 70% in the first half. Additionally, an emergency export measure at the government level is also scheduled to be announced in February.
This year, trade insurance will be supported at a record scale (252 trillion won). The exchange rate fluctuation insurance rate will be specially discounted by 30%, and the loan guarantee limit for small and medium-sized enterprises facing surging raw material import costs will also be increased to 150%. Long-term insurance to support nuclear power, defense, and plant contract awards will be expanded to 20 trillion won.
Foreign direct investment has set a target of '35 billion dollars,' which exceeds last year's record high of 34.57 billion dollars. To achieve this, cash support limits for foreign investments related to national advanced strategic technologies and global regional headquarters will be increased from 50% to 75%. Plans are underway to strengthen relay communication with foreign investors and foreign-invested corporations based in Korea.
Under the newly established 'International Investment Cooperation Ambassador,' efforts will be made to hold investment briefings (IRs) in major countries, including the United States. The foreign investment cash support limit will also be temporarily raised to a maximum of 75% this year, and the tariff reduction period will be expanded from a basic five years to a maximum of seven years.
△ Strengthening competitiveness in semiconductors and secondary batteries... restructuring industries facing oversupply
Efforts will also be made to enhance the competitiveness of key industries, including semiconductors and secondary batteries.
Regarding semiconductors, enacting a special law has been prioritized. To create a system semiconductor ecosystem, projects for the development of device-integrated (on-device) AI semiconductors will also be pursued.
Regarding electric vehicles, a plan to strengthen the competitiveness of eco-friendly vehicles and secondary batteries will be announced in January, and a transition plan for the automobile parts ecosystem will also be established within this year. Efforts will be made to support the enactment of the used battery law, enhance NCM battery performance, and develop new lithium iron phosphate (LFP) battery products.
Efforts to strengthen the competitiveness of the petrochemical and steel sectors facing oversupply issues will also be initiated. First, the petrochemical industry will pursue restructuring, and designated areas in the petrochemical complex will be recognized as 'industrial crisis preemptive response areas' to minimize the economic impact. The steel industry, facing overlapping challenges of oversupply, carbon regulations, and trade risks, will initiate a task force for competitiveness enhancement.
Support will be provided in future growth areas such as artificial intelligence (AI), robotics, and bio. The government plans to announce a strategy for the spread of industrial artificial intelligence (AX) in the first quarter, selecting 60 additional projects to support with R&D budgets and more. It will also expedite human-like robot development while establishing infrastructure for industrial and service robots with a scale of 200 billion won. In the bio sector, the national biomanufacturing base will be established to provide a foundation for bio research and manufacturing innovation.
△ Efforts for rapid passage of the three energy laws… formation of a carbon-free energy ecosystem
In relation to energy, key tasks include power supply and demand, nuclear power exports, and East Sea deep gas exploration.
The 11th Basic Electricity Supply and Demand Plan will be established, and efforts will be made to persuade the National Assembly for the rapid passage of the three energy laws represented by the 'High-level Waste Special Law,' 'Power Network Special Law,' and 'Offshore Wind Power Special Law.'
The nuclear power contract in the Czech Republic is being pursued with a goal of signing the main contract in March, and additional bids will be developed.
The East Sea deep gas exploration will proceed smoothly with the ongoing first drilling, and based on the drilling results, efforts will be made to attract investments from overseas corporations with experience in deep-sea development.
The carbon-free energy industrial ecosystem, including nuclear power and renewable energy, will also be balanced in its growth. The workload for nuclear power will expand to 35.5 trillion won, an increase of 2 billion won from last year (33 trillion won), and regional centers to strengthen the business capabilities of small modular reactors (SMR) will start construction in the second half of the year. A hydrogen business law will also be enacted to support hydrogen infrastructure development.
Efforts will also be made to build a sustainable energy system. A market for LNG power plant capacity will be opened, and a revamp of the renewable energy portfolio standard (RPS) will be pursued to promote competition from the entry stage into the electricity market. A distributed energy special zone will be established after applications are processed, allowing local power companies to sell directly within the region by the second quarter. Moreover, the energy welfare support project, which is currently being developed separately for each energy source, will be integrated to increase efficiency.