South Korea is bracing for a potential trade war with the US by pumping billions into its key industries. The government has announced a massive $25 billion support package to help its economy weather the storm. The move comes after the US threatened to slap a 25% tariff on imports from South Korea.
The plan was revealed by Choi Sang-mok, South Korea’s Deputy Prime Minister and Finance Minister, after a meeting with economic officials. The government will allocate $17.5 billion to help companies affected by the tariffs. Another $7 billion will go towards supporting the semiconductor industry. Low-interest loans worth $2.1 billion will also be made available to semiconductor companies.
One of the key initiatives is the creation of “Mini-Fabs” – small-scale semiconductor manufacturing facilities that mimic real-world production. These will allow chip design companies to test their products and speed up development. The government also plans to establish a semiconductor innovation center, similar to Belgium’s IMEC, to attract top talent from around the world.
Choi will meet with US Treasury Secretary Scott Bessent next week to discuss the trade tensions. However, South Korea is preparing for the worst-case scenario, where talks break down. The government is pushing ahead with its support package to ensure its economy remains resilient.
The move is a clear indication that South Korea is taking the trade threat seriously. By investing in its key industries, the government hopes to mitigate the impact of the tariffs and keep its economy on track.