$1 Billion Emergency Fund: Korea’s Bold Move to Shield SMEs from US Tariff Shock

Small and medium-sized enterprises (SMEs) in Korea are about to receive a significant lifeline as global trade tensions intensify. The Ministry of SMEs and Startups has just unveiled an ambitious support package aimed at businesses struggling with the recent US tariff measures. Will this billion-dollar intervention be enough to keep Korean exporters competitive in an increasingly challenging global marketplace?

Emergency Funding Takes Center Stage

The government is deploying targeted financial support with preferential terms to immediately address cash flow challenges faced by SMEs.

• A special “Trade Risk Response Emergency Fund” worth 100 billion won (approximately $72.5 million) has been established specifically for businesses affected by tariff measures
• This emergency fund will operate on a temporary basis throughout 2025 with preferential interest rates and tailored support conditions
• The ministry emphasized that this measure aims to reduce the financial burden on small businesses while easing export difficulties

Comprehensive Liquidity Solutions

Beyond the emergency fund, the government is implementing a multi-pronged approach to ensure business continuity across affected sectors.

• An additional 500 billion won ($363 million) in emergency liquidity will be supplied to struggling businesses
• A massive 4.5 trillion won ($3.26 billion) “Crisis Enterprise Special Guarantee” program is being established through credit guarantee institutions
• The Korea Credit Guarantee Fund will provide 3.3 trillion won ($2.39 billion) while the Korea Technology Finance Corporation will contribute 1.2 trillion won ($870 million) in guarantees

Export Diversification Strategy

The initiative includes dedicated resources to help Korean companies reduce dependence on volatile markets by exploring new global opportunities.

• 100 billion won ($72.5 million) will be allocated specifically to support market diversification efforts and entry into new international markets
• The Export Voucher program will receive an additional 89.8 billion won ($65.1 million) in funding
• This expansion will increase the number of supported businesses from 3,290 to 8,058 companies, more than doubling the program’s reach

Crisis Response Framework

This emergency package is part of a broader government strategy to address multiple concurrent challenges facing the Korean economy.

• The ministry plans to submit a supplementary budget proposal of 5.01 trillion won ($3.63 billion) to the National Assembly
• The comprehensive budget addresses multiple concerns including trade disputes, wildfire damage, delayed domestic recovery, and global AI technology competition
• This represents a coordinated governmental approach to maintaining Korean economic competitiveness amid global uncertainty

These decisive measures demonstrate Korea’s commitment to protecting its vital SME sector, which forms the backbone of the national economy. As global trade tensions continue to evolve, the effectiveness of these support mechanisms will be closely watched by economists, investors, and business leaders alike.

Keywords

SME support, Trade tensions, Export diversification, Financial guarantees

Hashtags

#KoreanSMEs #TradePolicy #EconomicResilience

한국어 요약

• 중소벤처기업부가 미국의 관세 조치에 대응하기 위해 1000억 원 규모의 ‘통상리스크 대응 긴급자금’을 한시적으로 신설
• 5000억 원 규모의 긴급 유동성 공급 자금 확대와 함께 4조 5000억 원 규모의 ‘위기기업특례보증’ 신설
• 수출국 다변화 및 신시장 진출 지원 자금 1000억 원 추가 및 수출바우처 사업에 898억 원 추가 투입으로 지원 기업 수 3290개에서 8058개로 확대
• 통상문제, 산불 피해, 내수 회복 지연, AI 기술 경쟁 등에 대응하기 위한 총 5조 112억 원의 추경예산안 국회 제출 예정