Ministry of SMEs and Startups to Respond to Trump's 'Tariff Bomb'... Support Measures to Be Announced This Month

Establishment of Consultation and Reporting Centers for Damage Cases
Provision of Emergency Management Stabilization Funds

The Ministry of SMEs and Startups will announce a 'Support Plan for SME and Venture Business Exports' within this month to respond to U.S. President Donald Trump's 'tariff bomb' policy. Consultation centers will be established in 13 regional offices nationwide to receive damage reports from exporting SMEs and provide policy financing such as emergency management stabilization funds.

On the 12th, the Ministry of SMEs and Startups held a 'Preliminary Meeting to Understand the Impact on SMEs and Listen to Corporate Difficulties under the Trump Administration's Second Term Policies' at the 63 Building in Yeongdeungpo-gu, Seoul, discussing measures to respond to changes in the external environment such as high exchange rates. The meeting was attended by Minister Oh Young-joo of the Ministry of SMEs and Startups, three experts including Kim Jeong-hyun, a research fellow at the Korea Institute for Industrial Economics and Trade, and Gu Gyeong-hyun, team leader at the Korea Institute for International Economic Policy, as well as six representatives of exporting SMEs.

Export company representatives unanimously expressed concerns about the 'export impact' caused by the Trump administration's universal tariff policy. Lee Jae-sik, CEO of Ideal, who manufactures plastic panels for displays at a local factory established in Mexico and exports them to the U.S., said, "If the U.S. imposes tariffs on Mexican products, damage to exports to the U.S. is inevitable." Representatives of SMEs present, including Iljin Altech, which produces food, pharmaceutical, and industrial packaging using aluminum rolling technology and exports to the U.S., Dongin Chemical, which produces special materials for aerospace and exports to the U.S., and MacPyTech, which exports bidirectional laser measuring instruments to the U.S., also lamented that exports would be significantly affected.

The U.S. has imposed an additional 10% tariff on all Chinese products since the 4th and decided to impose a 25% tariff on all steel and aluminum products regardless of the exporting country starting from the 12th, promoting a universal tariff policy. According to research by the Korea Institute for Industrial Economics and Trade, if the Trump administration imposes a 25% tariff on Canadian and Mexican products and a 10% tariff on products from other countries, the export value of major items from domestic SMEs to the U.S. is expected to decrease by up to 11.3% (1.2 trillion KRW) compared to last year. Last year, the total export value of domestic SMEs was 115.1 billion USD, an increase of 4.9% from the previous year, with exports to the U.S. accounting for 16.3% (18.74 billion USD), the largest share, making the impact unavoidable.

The Ministry of SMEs and Startups plans to implement policies such as damage reporting and financial support to alleviate the difficulties faced by exporting SMEs. First, the ministry will establish complaint centers in 13 regional offices nationwide to receive and consult on damage cases of domestic SMEs caused by changes in the external environment. Additionally, policy financing such as emergency management stabilization funds will be provided to exporting SMEs, with additional support if the crisis deepens.

Furthermore, to establish the export structure of domestic SMEs, close support for beginner export companies will be strengthened, and the scope of export policies will be expanded through tech service exports, overseas expansion, and fostering new Hallyu items. New export strategies will be pursued by emerging markets and regions such as ASEAN and the Middle East, and a 'SME and Venture Business Globalization One-Team Council' will be formed to strengthen support functions. The 'Support Plan for SME and Venture Business Exports' containing these details will be compiled and announced by the ministry within this month.

Minister Oh said, "Since the impact of changes in trade policies such as tariffs under the Trump administration's second term is significant for domestic SMEs, we are closely monitoring the effects and jointly responding with related ministries. We will thoroughly respond so that new protectionism can be both a challenging situation and a new opportunity for our SMEs, and we will present support measures to enhance the export competitiveness of our SMEs within this month."