The government will inject 13.6 trillion won in emergency funds for corporations affected by tariffs and expand the scale of trade insurance supply to a record 270 trillion won this year. It will also support export vouchers worth 420 billion won until next year, and increase the logistics cost support limit for each corporation from 30 million won to 60 million won. In response to shrinking overseas demand for major export items, it will implement measures to stimulate domestic demand, such as providing transition support funds when changing from internal combustion vehicles to electric vehicles.
On the 3rd, the government announced the "post-tariff negotiation support measures" at the ministerial meeting on economic relations and the ministerial meeting for strengthening industrial competitiveness.
◇ Emergency support for affected corporations… Total mobilization of policy funds and trade insurance
To secure liquidity for corporations affected by tariffs, the government will inject 13.6 trillion won in policy funds. The Korea Development Bank will expand the lending limit for small and medium-sized enterprises from 3 billion won to 30 billion won and from 5 billion won to 50 billion won, reducing the interest rate by 0.3 percentage points. The Export-Import Bank will broaden the support target of the "Crisis Response Special Program" from corporations with a credit rating of "p5+" to those rated "p4 or below."
The Korea Small Business Administration will newly include copper industries, in addition to existing steel, aluminum, automotive, and parts, in the items eligible for emergency fund support. The Korea Credit Guarantee Fund and the Korea Technology Finance Corporation will provide special guarantees at a maximum 95% guarantee rate and a guarantee fee rate of up to 0.5 percentage points for corporations in tariff-affected sectors.
The Korea Trade Insurance Corporation will supply trade insurance up to a record 270 trillion won. The 60% discount on insurance and guarantee fees will be expanded from the existing "tariff item sectors" to "all sectors." In addition, a new "guarantee limit special increase program" will be launched to uniformly increase guarantee limits by 0.5 times for small and medium-sized enterprises exporting to the U.S. Companies with local subsidiaries in the U.S. will also have additional guarantees for medium- to long-term operating funds.
◇ Export vouchers of 420 billion won… Special support of 570 billion won for high-tariff items like steel
Measures have also been prepared for corporations facing pressure from increased logistics costs in addition to tariff burdens. Until next year, approximately 420 billion won will be supported through export vouchers, and the logistics cost support limit will be raised from 30 million won to 60 million won. The scope of support will also be expanded beyond simple transportation costs to include warehousing, delivery, and packaging services.
The usage fees for 55 joint logistics centers in the U.S. for small and medium-sized enterprises will be reduced by 90%, and a dedicated logistics center for K-cosmetics will be newly established in the U.S. next year. In addition, the limit for tariff response vouchers will be expanded from 120 million won to 150 million won, and the time required for voucher issuance will be significantly reduced from the existing 45 days to 3 days through the introduction of a fast track.
For items subject to a 50% tariff, such as steel and aluminum, a special support of 570 billion won will be allocated. Related secondary compensation projects will be established to alleviate interest burdens on small and medium-sized enterprises. A government official said, "It is expected that the secondary compensation program will create a lending support effect of 150 billion won." It is also being promoted to establish a 'steel export supply chain reinforcement guarantee product' that preferentially adjusts loan interest rates for cooperating manufacturers based on contributions from large corporations in the steel industry and financial institutions, and to expand guarantee limits. In addition, emergency tariff quotas will be applied to key raw materials for steel this year.
◇ Creating domestic demand and diversifying markets… Providing transition support funds for electric vehicles
Measures to stimulate domestic demand will be pursued to compensate for the shrinking overseas markets for major export items such as automobiles and electronics. Specifically, transition support funds will be provided when replacing internal combustion vehicles with electric vehicles, and refund benefits will be given for the purchase of high-efficiency home appliances.
Institutional improvements to respond to unfair trade have also been included. The Korea Customs Service will operate the "Special Investigation Team for Trade Security" to block circumvention exports and dumping, and will move to revise laws requiring the submission of Quality Inspection Certificates (MTC) upon the import of steel materials.
The government also announced measures to find new export routes. The target for support at overseas exhibitions, delegations, and Hallyu expos will be expanded from 1,600 companies to 3,000, and the number of regional specialized exhibition support targets will increase from the existing 18 to 68.
Additionally, efforts will be made to expedite the early ratification of free trade agreements (FTAs) with the Middle East and Latin America, and to speed up multilateral negotiations such as reviewing membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The limit for covering the costs of failed overseas certifications will be raised to 70%, and a system to respond to non-tariff barriers, such as artificial intelligence (AI)-based technical regulations, will be established.
A government official said, "To strengthen the medium- to long-term competitiveness in key industries, plans will also be made to establish medium- to long-term strategies such as 'AI future vehicle competitiveness reinforcement measures' and 'steel industry advancement measures' by the second half of this year."