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Seoul announces emergency export measures in anticipation of downturn

Published: 18 Feb. 2025, 16:19

SHIN HA-NEE
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Acting President and Minister of Economy and Finance Choi Sang-mok, right, speaks during an export strategy meeting, with Industry Minister Ahn Duk-geun to his right at the government complex in central Seoul on Feb. 19. [JOINT PRESS CORPS]

With Korea’s export growth slowing after a robust 2024, the government announced emergency measures to navigate surging external uncertainty spurred by U.S. President Donald Trump’s tariff implementation.

The plan, announced during an export strategy meeting held at the government complex in central Seoul on Tuesday, consists of four pillars: tariff responses, a record 366 trillion won ($253 billion) in export financing, export market diversification and additional support in marketing, logistics and more.

“We face greater uncertainty than ever in the export sector this year, with the U.S. administration introducing a series of tariff policies,” said acting President and Minister of Economy and Finance Choi Sang-mok in his opening remarks during the meeting.

“As the global trade landscape is changing in real time, we need to continue to devise and adapt solutions much like adjusting our sails according to changing winds.”

After logging an 8.1 percent increase in exports to hit a fresh record of $683.7 billion last year, Korea became the world’s sixth-largest exporter, according to the Ministry of Economy and Finance, a two-notch upgrade from a year earlier. Strong export growth accounted for 90 percent, or 1.8 percentage points, of Korea’s GDP growth of 2 percent last year.

Containers are stacked at a port in Pyeongtaek, Gyeonggi, on Feb. 14. [NEWS1]

However, with the second Trump administration announcing a series of tariff plans and threats, the export-driven economy is now caught between rising protectionism, persistent market volatility and harsher competition in the global market compounded by weakening industrial growth momentum.

The government, expecting the country’s export conditions to deteriorate significantly in the first half of the year and gradually recover in the latter half, described the current situation as “an emergency” and “the last opportunity to maintain the export growth momentum” in its latest emergency plan.

The Finance Ministry plans to utilize more than 90 percent of the 240 billion won budget allotted for the export voucher program in the first half of the year to provide export subsidy vouchers to small- and mid-sized exporters that can be used to access consulting services to navigate newly implemented tariffs and seek new markets.

Moreover, the government will double the export credit insurance coverage with lower premiums for companies affected by newly implemented tariffs or other trade barriers.

Companies that are relocating their overseas production facilities back to domestic soil will receive tax cuts along with other regulatory incentives.

The latest export financing budget is a 6 trillion won increase from the government's previous announcement in January.

To diversify export markets, the government also aims to explore new opportunities — especially in the Global South — by establishing five new export support agency offices in Mexico, Georgia, Brazil, South Africa and Vietnam. Export credit insurance worth 55 trillion won will be allocated for companies operating in the countries, up from last year’s 48 trillion won.

To boost waning growth momentum and reduce reliance on key flagship items such as semiconductors, the government aims to seek new export items in various promising sectors including digital services, agricultural products and cosmetics.

BY SHIN HA-NEE [[email protected]]