[Lee Jae-myung Administration 1 Year] Industry Ministry Highlights "Tariffs, Middle East Crisis, and Manufacturing AI as Key Achievements"

Korea-U.S. Tariff Negotiations Concluded
All-out Efforts to Secure Oil and Gas Supply Amid Hormuz Crisis
"M.AX Alliance" Launched... Full-scale AI Manufacturing Innovation

Kim Jeonggwan, Minister of Trade, Industry and Energy, is answering President Lee Jae-myung's questions at the Cabinet meeting combined with the Emergency Economic Inspection Meeting held at the Blue House on the 20th. Photo by Yonhap News

The Ministry of Trade, Industry and Energy has presented core achievements to mark the first anniversary of the Lee Jae-myung administration, highlighting trade negotiations with the United States, export expansion, response to the Middle East-driven energy crisis, and the transition to artificial intelligence (AI) in the manufacturing sector (M.AX).

On May 20, Kim Jungkwan, Minister of Trade, Industry and Energy, announced these outcomes in the "First Anniversary Cabinet Report on the Achievements of the Ministry of Trade, Industry and Energy" during a Cabinet meeting.

Minister Kim explained that through Korea-U.S. tariff negotiations, the ministry reduced tariff burdens on key export items such as automobiles and pharmaceuticals to around 15%. He also stated that Korea secured fair treatment in the semiconductor sector, ensuring that it is not at a disadvantage compared to competing countries. In addition, the ministry expanded the foundation for entry into strategic industries such as shipbuilding and energy by reaching an agreement to establish the Korea-U.S. Shipbuilding Cooperation Center.

Export performance was also cited as a major achievement. Minister Kim stated that Korea’s global export ranking rose from 7th last year to 5th as of the cumulative total through February this year. The proportion of trade with the United States and China fell from 38.1% last year to 35.8% this year, while the share with ASEAN, Central and South America, and the CIS increased from 22.6% to 23.6%, reflecting progress in diversifying into new markets. Annual exports this year are projected to reach a record high of 709.3 billion dollars.

Exports of K-consumer goods also continued to increase. From January to April this year, beauty exports rose by 24.1% year-on-year, fashion and apparel by 13.7%, and food by 7.8%. The ministry explained that it is expanding the export base by raising 2.4 trillion won in large- and small-business joint trade finance, providing 15 trillion won in preferential financing for export companies, and implementing the "K-Export Star 500" project.

The response to the energy and resource crisis stemming from the Middle East war was also presented as a key achievement. Minister Kim stated that, despite concerns over the closure of the Strait of Hormuz, as of May, crude oil and naphtha reserves were secured at 90% of the average annual level, and 100% of alternative natural gas supplies from the Middle East had been secured. He explained that the ministry implemented multiple measures, including strategic oil reserve lending, oil reserve swaps, support for alternative imports, and assistance for navigating alternative routes around the Strait of Hormuz.

The volume of crude oil imports expanded from 48 million barrels from 14 countries in April to 77 million barrels from 19 countries in May. Minister Kim emphasized, "We mobilized all available means through a public-private one-team approach."

Measures to stabilize the industrial sector were also implemented. In the petrochemical industry, since May, two previously halted NCC (Naphtha Cracking Center) facilities resumed operations, and six facilities increased their operating rates, raising the industry’s average utilization rate from 55% to 70%. The ministry activated a priority supply system for healthcare, core industries, and essential goods, and is currently working to ban hoarding and convert export volumes for domestic use.

As a measure to stabilize people’s livelihoods, the ministry introduced the petroleum price ceiling system. The early implementation of the price ceiling had the effect of lowering prices by 0.6 percentage points in March and 1.2 percentage points in April. In addition, 334 "good gas stations" were selected nationwide, with information provided through Opinet and T Map, and oil distribution management was strengthened through joint inspections by related ministries.

The transition to AI in manufacturing (M.AX) was also presented as a major initiative. The ministry has established the "M.AX Alliance," which currently comprises 11 divisions and over 1,500 companies and organizations, and is simultaneously promoting process AX, product AX, and industrial complex AX.

With the introduction of AI in semiconductor PCB processes, quality inspection time was reduced by 90%, and quality prediction accuracy in secondary battery electrode processes improved to 87%. In shipbuilding, the introduction of AI in ship assembly processes reduced working hours by 12.5%, and in the machinery sector, where unmanned inspection systems for agricultural machinery were applied, inspection speed increased by 11%. The number of AI factories expanded from 25 last year to 102 this year, with a target of building more than 200 by next year.

Minister Kim stated, "Through the development of AI semiconductors and humanoids, and the spread of AI in regional industrial complexes, we will drive productivity innovation across the manufacturing sector and secure future competitiveness."

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