Seoul, Sep 19 Industry Minister Kim Jung-kwan said on Friday the government will introduce a new export guarantee program worth around 400 billion won ($290 million) for the steel industry faced with steep tariffs from the United States.
Kim made the remarks during a meeting with top executives of major steel companies, including POSCO, in the southeastern city of Pohang.
The U.S. administration of President Donald Trump had imposed 25 percent tariffs on steel and aluminum imports before doubling the rate to 50 percent in June, reports Yonhap news agency.
"The government, steelmakers, financial institutions and policy lenders will work together to create a guaranteed scheme to strengthen the steel industry's supply chains," Kim said, noting that the measure will create an economic effect equivalent to about 400 billion won in support.
The minister also pledged to continue holding talks with Washington for tariff relief while vowing to roll out follow-up support measures for the industry and step up efforts to block unfair imports.
The government will also seek to ease regional economic strains triggered by the steel sector's difficulties while working with the National Assembly on legislation to bolster the industry, Kim added.
Washington's aggressive tariff scheme has hurt domestic steelmakers, with exports tumbling more than 25 percent on-year in July.
Meanwhile, the United States' trade policy is estimated to lower South Korea's economic growth rate by 0.45 percentage point this year, the central bank said.
After months-long negotiations, Seoul and Washington reached a crucial agreement in late July, under which the U.S. imposes a 15 percent tariff on South Korea, down from the initially planned 25 percent, in exchange for an investment pledge of US$350 billion in the U.S.
"The impact of the U.S.' tariff policies was limited in the first half on the back of U.S. companies' inventory accumulation, pre-exports to the U.S. by other countries and shared burdens by businesses. But the effects are expected to become more visible going forward," the Bank of Korea (BOK) said its latest biannual monetary policy report.
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