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Korea establishes $34 billion fund to propel strategic industries as global trade concerns persist

Published: 05 Mar. 2025, 13:26 Updated: 05 Mar. 2025, 19:04

SHIN HA-NEE
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Acting President Choi Sang-mok presides over a ministerial meeting on economic affairs and industrial competitiveness at the government complex in central Seoul on March 5. [JOINT PRESS CORPS]

Korea will establish a 50-trillion-won ($34 billion) fund to boost strategic industries such as semiconductors, AI and EV batteries, acting President Choi Sang-mok said Wednesday.

The move comes amid an escalating trade war spurred by U.S. President Donald Trump's aggressive tariff rollouts.

“With the U.S. government imposing 25 percent tariffs on imports from Canada and Mexico, and an additional 10 percent on Chinese imports, uncertainty in the trade environment continues to expand,” said Choi during a ministerial meeting on economic affairs and industrial competitiveness.

“The ongoing tech race among major economies is also accelerating, as the industrial landscape involving advanced technologies such as chips, AI and EVs is changing rapidly,” said the acting president, stressing, “First and foremost, we should be ahead of the curve.”

To secure leadership in cutting-edge technology development, the government promised “bold and disruptive support measures,” including a fund dedicated to strategic industries.

Korea Development Bank will establish the fund, which will be financed through state-guaranteed bonds with the bank covering operational costs. The fund will incorporate the existing 17 trillion won low-interest loan program for the semiconductor industry, as well as the previously announced 34 trillion won program for EV batteries and biotech.

The government expects the total scale of financial support to reach 100 trillion won, with the addition of funds from private banks.

The plan is to provide low-interest loans and make equity investments in companies — regardless of their size — in strategic sectors, including semiconductors, AI, EV batteries, biotechnology and robotics.

The goal is to boost investments in long-term and early-phase infrastructure projects or research and development programs, according to Choi.

The government plans to submit an amendment bill to the Korea Development Bank Act and a motion for parliamentary consent for state-guaranteed bonds to the National Assembly in March.

BY SHIN HA-NEE [[email protected]]