South Korea reveals financial support worth approximately $225 billion for export companies grappling with high tariffs
In response to the increasing pressure on Korean exporters due to higher costs from US tariffs, a coalition of financial groups and banks have pledged to provide substantial financial support.
The Financial Services Commission (FSC) organized a meeting, chaired by FSC Vice Chairman Kwon Dae-young, to discuss responses to the US trade measures. During the meeting, it was announced that the five major financial groups - KB, Shinhan, Hana, Woori, and NongHyup - would provide a combined 95 trillion won in loans, guarantees, and interest relief to help exporters cope with the tariffs.
In addition to this, state-run lenders such as the Korea Development Bank (KDB), Industrial Bank of Korea (IBK), and Export-Import Bank of Korea (Eximbank) will provide an additional 172 trillion won until the end of next year.
The Korean government is also preparing a 1 trillion-won fund to aid restructuring in the petrochemical, auto, and chip industries. The name of the corporate restructuring fund, prepared by the financial supervisory authority and Korea Asset Management Corp., is the "1 Trillion Won Corporate Restructuring Fund."
The FSC and Korea Asset Management Corp. are also preparing a corporate restructuring fund worth 1 trillion won to support firms in industries including petrochemicals, steel, autos, semiconductors, batteries, and displays.
Hana Financial Group plans to deepen ties with Hyundai Motor and Kia to support auto exporters under pressure from higher costs. KB Financial Group, on the other hand, plans to support restructuring, R&D, and new market expansion for firms threatened by US tariffs. Shinhan Financial Group, meanwhile, will focus its efforts on small and mid-sized enterprises, offering solutions tailored to different sectors.
NongHyup Financial Group will provide both financial and advisory support to exporters under pressure from US tariffs, with at least 60 percent of the fund dedicated to core export sectors and their suppliers.
Policy banks, including KDB and Eximbank, will expand crisis response lending and credit guarantees. KDB is raising loan limits for exporters tenfold, while Eximbank is broadening eligibility and cutting interest rates. IBK will continue consultations through its 640-branch network.
FSC Vice Chairman Kwon emphasized the need for assistance to extend beyond survival support and focus on reinforcing competitiveness and securing new growth engines. He urged banks to act with responsibility as exporters prepare for prolonged tariff pressures, emphasizing the importance of delivering real help to companies in urgent need.
Despite the lowering of a planned blanket tariff rate on Korean goods to 15%, Korean officials believe the burden on exporters remains significant. Targeted measures will be stepped up for industries most affected, such as autos, steel, petrochemicals, and small and mid-sized exporters in supply chains.
The US has imposed duties of up to 50% on 407 items, including steel and aluminum, despite the lower tariff rate. This has put a strain on Korean exporters, leading to the unprecedented financial support from the Korean financial sector.
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