Seoul: The government has announced an allocation of up to 570 billion won (US$408.8 million) in financial support for South Korean companies impacted by the recent 50 percent U.S. tariff on steel and aluminum imports. This initiative, unveiled by the industry ministry, aims to mitigate the adverse effects of the tariffs and is part of a broader government strategy to enhance export performance amidst global trade challenges.

According to Yonhap News Agency, the financial aid package includes a special low-interest loan program targeted at companies within the steel and aluminum sectors. It also covers expenses aimed at reducing interest rates on existing loans for small and medium-sized enterprises (SMEs) in these industries. Additionally, the government plans to increase the provision of trade insurance to 270 trillion won, a rise from the previously set 256 trillion won.

In a further effort to support industries affected by tariffs, the government intends to improve access to a 13.6 trillion-won emergency liquidity fund established earlier this year. The Ministry of Trade, Industry and Energy also highlighted plans to stimulate domestic demand for critical export products like automobiles, home appliances, and steel to counterbalance the reduction in foreign demand resulting from the U.S. tariff measures.

The government is considering a subsidy program for electric vehicles and high-efficiency home appliances and aims to establish a 100 trillion-won fund to boost investment in strategic South Korean industries. Measures to combat unfair trade practices, including tariff circumvention and dumping, are also on the agenda, alongside efforts to diversify export products and markets.

Future announcements are expected to detail additional strategies to enhance competitiveness in the mobility, steel, and secondary battery sectors. This follows a significant agreement in late July between Seoul and Washington, where the U.S. agreed to reduce tariffs on South Korean goods in exchange for a US$350 billion investment commitment in the U.S. Under this deal, tariffs on Korean cars will also decrease from 25 percent to 15 percent.