South Korea is working to secure and bolster its key domestic manufacturing industry to weather the storm of President Donald Trump’s tariff-based trade war.
Seoul is deploying a $23 billion support package to stabilize its semiconductor and pharmaceutical industries as the government seeks to negotiate a mutually beneficial arrangement during Trump’s 90-day pause on his tariff plan.
“The U.S. government has postponed its plans for reciprocal tariffs for 90 days,” said South Korean Finance Minister Choi Sang-mok during a meeting in Seoul on Tuesday. “There’s anticipation that product-specific tariffs will be announced for sectors such as semiconductors or pharmaceuticals.”
He continued, “This is a valuable time to strengthen the competitiveness of our companies in the face of a global trade war.”
It marks a major increase from last year’s stimulus package, which totaled approximately $18 billion.
Officials hope the injection of funds — made through low-interest loans and subsidized infrastructure projects — will spur investment and keep the nation’s key industries competitive despite the instability caused by the threat of U.S. tariffs.
The U.S. Department of Commerce said in a notice this week that it will launch an investigation “to determine the effects on national security of imports of semiconductors, semiconductor manufacturing equipment, and their derivative products.”
Earlier this month, Trump expressed optimism about negotiations with Seoul.
“I just had a great call with the Acting President of South Korea. We talked about their tremendous and unsustainable Surplus, Tariffs, Shipbuilding, large scale purchase of U.S. LNG, their joint venture in an Alaska Pipeline, and payment for the big time Military Protection we provide to South Korea,” Trump said on Truth Social.
He continued, “They began these Military payments during my first term, Billions of Dollars, but Sleepy Joe Biden, for reasons unknown, terminated the deal. That was a shocker to all! In any event, we have the confines and probability of a great DEAL for both countries.”
Tariffs meet South Korean domestic turmoil
The tariff upheaval comes at an inopportune time as former President Yoon Suk Yeol stands in court to face charges of rebellion over his institution of martial law in December.
TRUMP OPENS TALKS WITH SOUTH KOREA ON TARIFFS: ‘THINGS ARE LOOKING GOOD’
South Korea’s Constitutional Court previously upheld Yoon’s impeachment and removal from office, ruling that his decree “caused confusion in the society, economy, politics, diplomacy and all other areas.”
Yoon’s trial is expected to take an extended period of time, possibly multiple years, due to the massive amount of evidence and witnesses.