The Ministry of SMEs and Startups (Minister Oh Young-joo, hereinafter referred to as the Ministry of SMEs and Startups) announced that it held a 'Trump 2nd Administration Response, SME Support Roundtable' at the 63 Building in Seoul on the 12th.
In order to respond to recent changes in the external environment, such as high exchange rates due to the Trump administration’s second term policies, the Ministry of SMEs and Startups has been organizing and operating a Trump second term response task force since November of last year. This meeting was arranged to analyze the impact of Trump administration’s second term policies, such as tariff policies, on our SMEs and to discuss ways to secure export competitiveness of our SMEs.
The global economy is rapidly changing with deglobalization and reorganization of the global supply chain. In particular, the United States imposed an additional 10% tariff on all Chinese products starting February 4, and decided to impose a 25% tariff on all steel and aluminum products regardless of the exporting country starting March 12.
At the meeting that day, the Korea Institute for Industrial Economics and Trade presented the impact of the Trump administration’s universal tariff policy on exports from our small and medium-sized enterprises. Assuming the most similar scenario to the current policy, if a 25% tariff is imposed on products from Canada and Mexico and a 10% tariff is imposed on products from other countries, exports to the U.S. of major items from our small and medium-sized enterprises are likely to decrease by up to KRW 1.2 trillion (-11.3%).
Next, various difficulties faced by export companies were discussed. First, Dong-In Chemical Co., Ltd., which produces special aerospace materials using Chinese raw materials and supplies them to U.S. aerospace and satellite companies, predicted that if the U.S. bans the use of Chinese raw materials, it will face enormous difficulties in production and export.
Idel Co., Ltd. is a company that has established a local factory in Mexico, where production costs are low, to produce plastic panels for displays and export them to the United States. The company said that if the United States imposes tariffs on Mexican products, its exports to the United States will inevitably be hit.
Iljin Altec Co., Ltd. is a company that produces food, pharmaceutical, and industrial packaging products using aluminum rolling technology and exports them to the United States. It was concerned about the impact on its exports when the United States imposed tariffs on aluminum products from all countries starting March 12.
On this day, the Ministry of SMEs and Startups also discussed the 'SME and Venture Company Export Support Plan' scheduled to be announced in February to alleviate the difficulties faced by exporting SMEs due to changes in Trump's second term trade policy.
First, the Ministry of SMEs and Startups will establish a complaint reporting center in 13 regional offices across the country to respond to short-term export issues and to promote consultation and reporting of damages suffered by exporting SMEs due to high tariffs, high exchange rates, and supply chain reorganization. In addition, it will provide policy financing such as emergency management stabilization funds to exporting SMEs without interruption and will also consider additional support in case the crisis worsens.
We will also implement policies to establish a solid export structure for our small and medium-sized enterprises. We will strengthen close support for companies starting out in exporting, and expand the scope of export policies to include exports of tech services, overseas expansion, and fostering of new Korean wave products.
In addition, we plan to newly promote export strategies by emerging market and region, such as ASEAN and the Middle East, and strengthen the support function of the 'SME Globalization One Team Council' to efficiently support them.
Minister Oh Young-joo said, “The changes in trade policies, such as tariffs, by the second-term Trump administration are having a significant impact on our small and medium-sized enterprises, so we are closely monitoring their impact and responding jointly with relevant ministries.” He added, “We will thoroughly respond to new protectionism so that it can be a challenge but also a new opportunity for our small and medium-sized enterprises, and we will come up with support measures to enhance the export competitiveness of our small and medium-sized enterprises within this month.”
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