Over 200 Trillion Won in Financial Support for Companies Impacted by U.S. Tariffs

The Government and Financial Sector to Provide Over 260 Trillion Won in Financial Support to Companies Impacted by U.S. Tariffs
172 Trillion Won in Policy Finance + 95 Trillion Won from Five Major Financial Groups
Additional 1 Trillion Won Corpo

Kwon Daeyoung, Vice Chairman of the Financial Services Commission (right), discussed response measures for the financial industry at the US Tariff Response Policy Finance-Financial Holding Companies Meeting held on the morning of the 3rd at the Government Seoul Office in Jongno-gu, Seoul. Photo by Financial Services Commission

The government and the financial sector will provide large-scale financial support of over 200 trillion won to companies affected by US tariffs. An additional Corporate Restructuring Fund will also be established to focus on restructuring support for crisis-hit industries such as petrochemicals.

The Government and Financial Sector to Provide Over 260 Trillion Won in Financial Support to Companies Affected by US Tariffs

The Financial Services Commission announced on September 3 that it convened the five major financial holding companies and policy finance institutions at the Government Seoul Office in Gwanghwamun to discuss financial support measures in response to the US reciprocal tariffs.

Policy finance institutions, including Korea Development Bank and Industrial Bank of Korea, have decided to provide a total of 172.1 trillion won in support by next year in response to the tariff crisis. Of this, 63 trillion won has already been supplied this year. The support will be focused on four main areas: resolving management difficulties (36 trillion won), export diversification (33 trillion won), strengthening industrial competitiveness (92 trillion won), and supporting business restructuring (11 trillion won).

Key support programs include the "Crisis Response Support Special Program" from Korea Development Bank and Export-Import Bank of Korea, which provides emergency management funds to small and medium-sized enterprises affected by tariffs. Korea Development Bank explained that it will expand the program's coverage from tariff-affected companies to those pursuing export diversification, and increase the support limit tenfold (from 5 billion to 50 billion won for medium-sized companies, and from 3 billion to 30 billion won for small companies). Export-Import Bank of Korea will also expand and reorganize its support from lower credit-rated companies to all small and medium-sized enterprises, offering preferential interest rates of up to 2.0 percentage points.

Kwon Daeyoung, Vice Chairman of the Financial Services Commission, stated, "The financial sector has been providing proactive support in response to the US government's tariffs since the beginning of this year," but emphasized, "As companies continue to face tariff burdens, it is time to further specify and strengthen financial support measures to minimize damages and secure future competitiveness."

Vice Chairman Kwon particularly stressed, "For traditional export industries that have been heavily impacted by tariffs, such as automobiles (parts), steel, and petrochemicals, we must strengthen financial support for export diversification, competitiveness enhancement, and restructuring toward high value-added business models."

The five major financial holding companies will provide a total of 95 trillion won in support by next year. Approximately 45 trillion won has already been supplied from the beginning of the year through the end of last month. Their support programs are diverse, including interest burden reduction, export and supply chain support, innovation growth support, and co-prosperity loans for large corporations.

Park Youngjun, Executive Vice President of KB Financial Group, said, "The impact of US tariffs is recognized as a serious issue that could threaten the survival of companies," adding, "We plan to actively support not only short-term liquidity but also the structural competitiveness of affected companies and related industries through investment in research and development (R&D), diversification of sales channels, and business restructuring."

Additional 1 Trillion Won Corporate Restructuring Fund to Support Industrial Restructuring

The government also announced on this day that it will establish an additional 1 trillion won Corporate Restructuring Fund to focus on supporting the restructuring of marginal companies in key industries such as petrochemicals, secondary batteries, steel, and semiconductors.

The Financial Services Commission stated that it will proactively establish the sixth Corporate Restructuring Fund, totaling 1 trillion won, to respond in a timely manner to the restructuring and financial improvement needs of key export industries facing management difficulties due to changes in the trade environment, such as US tariffs.

The Corporate Restructuring Fund is a policy fund that attracts private capital using policy funds as a catalyst to facilitate restructuring centered on the capital market, and invests these resources in companies undergoing restructuring. From 2018 to last year, a total of five rounds were established, amounting to 7.5 trillion won. The sixth fund has been set at 1 trillion won, double the originally planned 500 billion won, considering industry conditions.

Korea Asset Management Corporation (KAMCO), which is establishing the sixth Corporate Restructuring Fund, will create a dedicated blind fund for key industries (at least 250 billion won), ensuring that more than 60% of the total fund is invested in key industries, and will allocate all project fund investment resources (at least 375 billion won) to key industries.

KAMCO will announce the sub-fund recruitment plan starting today. For sub-fund (blind fund) managers, proposals will be accepted until the 24th, with the selection of managers to be finalized by the end of October.

Vice Chairman Kwon stated, "When it comes to tariff support, the numbers are important, but it is even more crucial that support provides real help to companies in desperate need," urging, "I hope the financial sector will take responsibility and ensure this support is delivered."