"Hedging" Trump's policy trade threats South Korea embraces the biggest export financing support in history

As Donald Trump is set to be inaugurated for his second term as President, South Korea on Monday pledged to provide record levels of financing support for exporters to alleviate the negative impact of changes in US trade policy. A statement from the South Korean Ministry of Finance said the government plans to provide policy financing worth 360 trillion Korean won (approximately $247.74 billion) to export companies this year through state-owned banks and institutions. The Ministry of Finance stated, "Some are concerned that under the incoming US government, external uncertainties will worsen and have adverse effects on exports." The Ministry of Finance also stated that this year, insurance support to prevent exchange rate fluctuations will increase from 1.2 trillion Korean won last year to 1.4 trillion Korean won, and government project spending such as trade fairs and delegations will increase from 2.1 trillion Korean won to 2.9 trillion Korean won. The institution noted that the semiconductor and rechargeable battery sectors are particularly threatened by the new US policies, while the defense, nuclear, and shipbuilding industries are seen as more hopeful because they have room for cooperation with the US. Incoming US President Trump, who will be inaugurated later on Monday, has declared his intention to impose high tariffs on major trading partners such as Mexico, Canada, and China, which is expected to also impact Korean companies operating factories in these countries. Economists have expressed concerns that the Trump administration may also implement trade policies targeting South Korea. Previously, South Korea, the fourth largest economy in Asia, had a record trade surplus with the US reaching $55.7 billion in 2024, a 25.4% increase from 2023. The Korea International Trade Association, the largest export organization in South Korea, predicts that export growth will slow to 1.8% this year. Last year, South Korean exports grew by 8.1% to a record high of $683.7 billion, with exports to the US increasing by 10.4%.