A South Korean flag is seen wedged between damaged wall tiles outside the Seoul Western District Court in Seoul on January 19, 2025, after supporters of South Korean President Yoon Suk Yeol stormed the building on January 19 after a judge extended the impeached leader’s detention over his ill-fated attempt to impose martial law. (Photo by ANTHONY WALLACE / AFP)
Seoul, South Korea — South Korea unveiled a $250 billion support package for its exporters Monday, citing the risk of possible tariffs by incoming US president Donald Trump.
The announcement comes hours after the central bank slashed its growth forecasts, pointing to protracted political uncertainty following President Yoon Suk Yeol’s declaration of martial law last month.
Yoon plunged the country into political chaos with his December 3 attempt to suspend civilian rule, though lawmakers voted it down just six hours later.
He has since been impeached and became the first sitting head of state to be arrested in a criminal probe on insurrection charges.
The Ministry of Finance said it was allocating massive new support for the country’s exporters, including tech giant Samsung and semiconductor leader SK hynix, owing to growing risks overseas.
“External uncertainties, such as the inauguration of the new US administration, pose concerns about potential adverse effects on the export front for businesses,” said Kim Dong-joon, deputy director of the Ministry of Finance support division.
In response, “the government plans to provide export financing on an unprecedented scale of KRW 360 trillion ($248.1 billion) this year”, the ministry said in a statement.
In part due to the protracted political chaos, South Korea’s won has fallen to record lows against the dollar in recent weeks.
The ministry said that to mitigate the foreign exchange rate volatility, they would boost the budget for exchange rate fluctuation insurance.
The package includes allowing the Export-Import Bank of Korea to provide KRW 50 trillion over the next five years to industries such as semiconductors and batteries, “which have recently faced challenges”, the statement said.
Kim added that the government would try “to develop financial support measures to help promising industries — such as defence, nuclear energy and shipbuilding — leverage US-Korea cooperation to expand export and contract achievements.”
South Korea is a major arms exporter and has signed huge deals for tanks and howitzers with NATO members such as Poland, although because of longstanding domestic policy, it does not supply weapons directly to Ukraine.
Following the short-lived period of martial law consumer sentiment fell to its lowest since the Covid-19 pandemic.