South Korea Boosts Export Financing to Tackle U.S. Trade Policy Risks

South Korea announced a record 360 trillion won ($247.74 billion) in policy financing for exporters to counter potential challenges posed by new U.S. trade policies under President Donald Trump’s second term. The finance ministry highlighted concerns about heightened external uncertainties and adverse effects on exports.

To mitigate risks, the government plans to increase foreign exchange insurance support to 1.4 trillion won, up from 1.2 trillion won last year. Funding for trade fairs and delegations will also rise from 2.1 trillion won to 2.9 trillion won.

Key industries like semiconductors and rechargeable batteries face significant risks under new U.S. policies, while sectors such as defense, nuclear energy, and shipbuilding show promise due to potential U.S.-Korea cooperation.

Trump’s administration has pledged to impose stiff tariffs on major trading partners, including Mexico, Canada, and China, raising concerns for South Korean companies operating in these regions. Economists warn South Korea could also face trade policy changes, particularly after achieving a record $55.7 billion trade surplus with the U.S. in 2024, up 25.4% from the previous year.

South Korea’s export growth is expected to slow to 1.8% this year, according to the Korea International Trade Association. In 2024, the country’s exports reached a record $683.7 billion, driven by a 10.4% rise in U.S. sales.

The government’s proactive measures aim to shield exporters and sustain growth amid global trade challenges, ensuring continued economic resilience.