Government Adds 'Protectionism Damage' to Emergency Funding Support for SMEs

On-Site Meeting to Discuss Support for Export SMEs
"Damage from Protectionist Trade" Added as a Condition for Emergency Management Stabilization Funds
Preferential Support for Export Diversification for Affected Companies

The government will provide emergency management stabilization funds to small and medium-sized enterprises (SMEs) affected by the tariff policies of the U.S. Donald Trump administration. In a situation where protectionist trade policies, including U.S. tariff measures, are strengthening, the government plans to implement this support permanently to increase assistance for export SMEs. This is the first time that damage caused by tariff policies and other protectionist trade measures has been explicitly stated as a reason for the government's emergency financial support to SMEs.

On the 12th, Oh Young-joo, Minister of SMEs and Startups, visited GJR Aluminum, an aluminum manufacturing and export SME located in Hwaseong, Gyeonggi Province, to listen to the difficulties faced by export SMEs due to the U.S. government's imposition of a 25% tariff on steel, aluminum, and derivative imports, and announced this policy.

Minister Oh Young-joo of the Ministry of SMEs and Startups and Kim Ki-moon, Chairman of the Korea Federation of SMEs, are inspecting the impact and difficulties faced by exporting small and medium-sized enterprises due to the implementation of U.S. tariffs at the headquarters of GJR Aluminum in Hwaseong, Gyeonggi Province on the 12th. Photo by Korea Federation of SMEs

After President Trump signed the tariff proclamation on steel and aluminum imports on the 10th of last month (local time), the U.S. government announced on the 18th of the same month the list of steel, aluminum, and derivative products newly subject to tariffs. From that day forward, a 25% tariff is imposed on all steel, aluminum, and derivative products imported into the United States.

At the on-site meeting, Yoo Kyung-yeon, CEO of GJR Aluminum, said, "Starting this year, to diversify exports, we are in the process of negotiating an annual export contract worth about $5 million with a U.S. local company for aluminum parts used in air conditioners, heat exchangers, and transformers. However, the tariff imposition by the Trump administration is causing difficulties in export negotiations."

Jung Han-sung, CEO of Shinjin Fastener Industry, a manufacturer of fasteners such as bolts, emphasized, "The domestic fastener industry finds it difficult to secure alternative raw material supply chains outside of domestic large corporations," and added, "Government-level monitoring and support policies are necessary to prevent a sharp rise in domestic steel and aluminum raw material prices."

The Ministry of SMEs and Startups has decided to operate an emergency response team to establish a rapid support system for companies affected by tariffs. First, 15 nationwide complaint centers will receive damage reports and provide consultation for export SMEs. They plan to guide the list of steel, aluminum, and derivative products subject to U.S. tariffs and provide related information and consultation support.

A survey on export difficulties and policy needs targeting steel and aluminum SMEs exporting to the U.S. will be jointly conducted by the Ministry of SMEs and Startups and the Korea Federation of SMEs within this month. Based on the results, additional measures such as tailored information provision, expanded origin certification training, and legal service support will be considered.

To promptly support SMEs experiencing management difficulties due to tariff measures, "damage from protectionist trade" will be added as a reason for emergency management stabilization funds, providing funds for business normalization. For affected companies, the application documents for emergency management stabilization guarantees will also be simplified.

Export diversification will be preferentially supported for companies affected by tariff measures. In the second announcement of the export voucher scheduled for May, a separate support quota will be allocated for companies affected by tariff measures to provide export strategy consulting. For SMEs pursuing export market diversification in response to tariff measures, evaluation procedures will be simplified through exemptions from policy fund priority evaluations and fast-track assessments.

Minister Oh Young-joo emphasized, "As the tariff policies of the second Trump administration materialize, the uncertainty of the external environment felt by export SMEs is higher than ever," adding, "Together with the Korea Federation of SMEs and item-specific associations and organizations, we will actively assist export SMEs that are concerned about or have suffered tariff damage in business normalization and export market diversification through prompt support."

This content was produced with the assistance of AI translation services.