Seoul, Sep 3 The government will provide up to 570 billion won ($408.8 million) in emergency financial aid this year to help South Korean companies cushion the blow from the 50 per cent US tariff on all steel and aluminium imports, the industry ministry said on Wednesday.
The measure comes as part of the government's comprehensive support package for Korean companies to help boost their exports amid global trade uncertainties, which was announced in a meeting of economy-related ministers, reports Yonhap news agency.
The 570 billion-won financing support will include a special low-interest rate loan program for companies in the steel and aluminum sectors and cover expenses to lower interest rates on loans previously extended to small and medium-sized enterprises (SMEs) in those sectors, according to the Ministry of Trade, Industry and Energy.
The government also decided to expand the volume of trade insurance to be provided this year to 270 trillion won, up from the initially planned 256 trillion won.
In addition, it will take steps to expand companies' access to the 13.6 trillion-won fund created earlier this year to provide emergency liquidity to firms in tariff-hit industries, the ministry said.
The ministry added the government will also work to boost domestic demand for the country's key export items, such as automobiles, home appliances and steel, to offset the decrease in overseas demand caused by U.S. tariff measures.
Such measures are expected to include a subsidy program for electric vehicles (EVs) and high-efficiency home appliances, as well as the creation of a 100 trillion-won fund to promote investment in South Korea, primarily in the country's strategic industries.
The government also plans to strengthen responses to unfair trade practices, such as circumvention of tariffs and dumping, while making efforts to diversify Seoul's export items and destinations.
In addition, the government plans to announce a set of measures later this year to enhance the fundamental competitiveness of the future mobility, steel and secondary battery industries, according to the ministry.
In late July, Seoul and Washington reached a crucial agreement in which the United States 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.
Under the deal, the U.S. also agreed to lower tariffs on Korean cars to 15 percent from 25 percent.
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