Comprehensive Tariff Measures by 13 Ministries... Breathing Space Provided but Fundamental Solution Lies in Industrial Innovation

[Financial News] The measures introduced by the government to mitigate the tariff shock originating from the United States are expected to provide breathing space for export companies in the short term. It is also noteworthy that the measures include detailed support plans reflecting field opinions to provide practical benefits to companies. However, there are criticisms that it is difficult to be a fundamental solution. There is a call for a roadmap for long-term industrial innovation and structural reform.

 On the 3rd, the government announced 'field experience-based support measures' under the three principles of △mobilizing all available policy tools △whole government response △policy centered on demand, seeing the need for extraordinary measures to support our companies in a variable and uncertain trade environment. To this end, 13 ministries jointly conducted dozens of relay meetings to listen to corporate difficulties and designed support measures based on them.
 The characteristic of this measure is that it includes practical support. What companies can immediately feel is financial and logistics support. The government will supply export vouchers worth 420 billion won by 2026 and increase the logistics support limit from 30 million won to 60 million won. It expanded from supporting only transportation costs to include warehouse storage, delivery, and packaging services, and reduced the usage fee of 55 joint logistics centers in the United States by 90%. Next year, a dedicated logistics center for K-cosmetics will also be established.
 The period for issuing export vouchers has been shortened from 45 days to 3 days, which is also noteworthy.
 Emergency support by industry is also included. For industries such as steel, aluminum, and derivatives that are subject to a high tariff rate of 50%, 570 billion won will be injected. The Korea International Trade Association will separately operate an emergency low-interest loan program worth 20 billion won for its members.
 In response to the decrease in overseas demand due to the impact of tariffs, domestic demand stimulation measures have also been introduced. The plan is to absorb the decrease in exports by establishing subsidies for electric vehicle conversion, a high-efficiency appliance rebate system, and promoting the use of domestic steel products at construction and civil engineering sites.

 A market diversification strategy for fundamental measures was also included. For companies entering emerging markets, the Korea Trade Insurance Corporation provides a special guarantee of up to 100 million won without a separate review, based only on the contract. The guarantee limit for early cashing of export bonds is also doubled. Additionally, to reduce the cost burden incurred in the process of obtaining overseas certification, 70% of the cost of certification failure is reimbursed.
 Experts agreed that while this measure is meaningful in alleviating short-term shocks, it is not a fundamental alternative.
 Professor Kim Tae-hwang of the Department of International Trade at Myongji University pointed out, "This support measure will help to some extent, even if it is not enough to completely cushion the shock," adding, "Most of them are short-term and temporary in nature."
 He continued, "What is fundamentally needed is industrial innovation, namely restructuring," emphasizing that "advanced industries need tailored legislative support like a special semiconductor law, and traditional manufacturing industries with declining competitiveness should be induced to innovate through a service strategy." He also added, "Instead of continuously pouring out measures, the government should first present a mid- to long-term roadmap towards innovation and development."


aber@fnnews.com Park Ji-young Reporter