South Korea’s ruling party and the government agreed Wednesday to take preemptive actions to respond to shifts in US trade policy as it concerns the Korean economy, ahead of the inauguration of US President Donald Trump later this month.
Concerns are growing that the new Trump administration's America First policy, with its universal tariffs, could stimulate inflation. The uncertainty in the global supply chain caused by the trade tension between the US and China lingers on, Rep. Kwon Young-se, the interim chair of the People Power Party said after a meeting between the government and ruling party lawmakers.
"In order to overcome the wave of changes that the second Trump term would bring, comprehensive measures must be drawn up in a swift manner," he said.
Presided over by acting President and Finance Minister Choi Sang-mok, a weekly meeting on pending economic issues is to take place to map out measures to counter the Trump administration’s universal tariff policies and his plan to repeal Joe Biden's signature climate bill, the Inflation Reduction Act. Trump plans to impose a blanket tariff of up to 20 percent on imports and as much as 60 percent to 100 percent on goods brought in from China
“Including acting president Choi, we will establish communication channels with the US at any level for omnidirectional outreach,” Kim said.
As a part of the efforts, Industry Minister Ahn Duk-geun is visiting the US this week to hold talks with key figures in the US government and Congress to promote industrial cooperation and investment between the two countries.
The Korea Trade Commission, the trade remedies authority under the Industry Ministry, will expand while activating 10 trillion won ($6.85 billion) to stabilize the country's supply chains and reduce disruptions from geopolitical tensions.
To find an alternative country for imports to reduce reliance on one specific country, trade cooperation with emerging markets like the United Arab Emirates and Guatemala will be fortified. Key mineral partnerships are to be forged with Tanzania and Chile.
In a separate meeting with economic ministers during the day, acting president Choi said the government would provide trade insurance worth up to 100 trillion won to small and medium-sized exporting companies. Related ministries will also set up emergency export measures in February.
Lawmakers and economic authorities viewed that the country’s financial markets had entered a path toward recovery. “In terms of the Kospi market, the index has recovered to 2,500 points, the level before the declaration of martial law,” Kim said.
Extending its winning streak to four consecutive trading days, the main board climbed 1.16 percent to close at 2,521.05 points. It is the highest close in the six weeks since President Yoon Suk Yeol attempted to impose martial law on Dec. 3, 2024.
