Synopsis
On January 20, Seoul announced plans to provide extensive financial support for exports this year, amid rising uncertainties in global trade due to the inauguration of US President-elect Donald Trump.Key Takeaways
- Extensive financial support for exports announced.
- Concerns over global protectionism rise with Trump's presidency.
- Export financing to reach 360 trillion won by 2025.
- Budget for exchange rate insurance to increase.
- Temporary slowdown in January exports expected.
Seoul, Jan 20 (NationPress) The government here on Monday revealed its intention to implement extensive financial initiatives to enhance exports this year, particularly as uncertainties in the global trade landscape are anticipated to escalate with the inauguration of US President-elect Donald Trump.
Trump is set to commence his second presidential term on Monday (US time), amplifying worries regarding a potential surge in global protectionism and its repercussions on South Korea's export-oriented economy.
"With the U.S. administration's policy adjustments and various global elements heightening external uncertainties, there are increasing apprehensions about possible obstacles for enterprises in the export domain," stated Kim Dong-joon, a senior official from the finance ministry overseeing a government task force on exports.
The task force, initiated in October, comprises senior representatives from the finance and industry ministries, along with other pertinent financial entities, to evaluate the current state of export financing and devise effective support strategies.
Trump's suggestion to enforce a 25 percent tariff on all products from Mexico and Canada, alongside an extra 10 percent tariff on goods from China, has sparked worries among South Korean firms.
To tackle prospective challenges, the government aims to offer export financing at an unparalleled scale, projected to reach 360 trillion won ($247 billion) in 2025 alone, according to the finance ministry.
Moreover, the budget for exchange rate insurance will increase from 1.2 trillion won to 1.4 trillion won in 2025 amidst the depreciating Korean won. Funding for international trade fairs and trade delegations will rise from 2.1 trillion won to 2.9 trillion won.
Meanwhile, Trade Minister Cheong In-kyo indicated on Monday that South Korea's exports are expected to face a slowdown this month due to a lesser number of business days resulting from the Lunar New Year holiday.
Cheong made this comment during a meeting with government officials after the government designated next Monday as a temporary national holiday, extending the holiday period to six days until next Thursday.
This designation has reduced the number of business days in January by four compared to the previous year, when the Lunar New Year holiday fell in February.
"As there is also a decline in demand from major Asian trading partners who are on holiday as well, exports are expected to see a temporary slowdown in January," Cheong added.
