South Korean companies affected by U.S. reciprocal tariffs, item-specific additional tariffs, and unilateral trade measures from other countries will now be eligible for government support. In addition to existing financial loans and management consulting, new assistance for market development will be introduced.
The Ministry of Trade, Industry and Energy announced that the revised 'Law on Response and Support for Changes in Trade Environment' (Trade Response Law) will take effect on October 22. The key aspect of this revision is the expansion of government support to include companies harmed by unilateral trade measures from foreign governments.
This revision follows a law enacted on April 21 and comes after a six-month preparation period. The support scope has been broadened from damages related to the implementation of free trade agreements (FTAs) to include damages caused by unilateral trade measures from foreign countries.
Previously, the South Korean government primarily supported companies negatively impacted by the implementation of trade treaties, such as FTAs. However, with the recent rise in protectionist measures and stricter export controls from major countries, there has been a growing need to expand the support scope to address various trade risks faced by companies.
The revised law allows companies that have suffered or are at risk of suffering damage from trade-related measures implemented by foreign governments under their domestic laws to receive trade response support. The Ministry of Trade has also prepared a notification specifying the scope of foreign trade measures eligible for support.
Universal and reciprocal tariffs, as well as item-specific additional tariffs, are included in the support scope. Tariff measures imposed unilaterally by other countries that exceed the World Trade Organization (WTO) most-favored-nation tariff rates or the tariff rates agreed upon in FTAs with South Korea are eligible. However, trade remedy measures such as anti-dumping duties, countervailing duties, and safeguards that comply with WTO agreements or FTA norms are excluded from the scope of foreign trade measures eligible for support.
Export controls on strategic goods and dual-use items are also included. Measures taken by foreign governments to restrict the export of specific products and technologies for security or national interest reasons, or to control the export and re-export of products produced in third countries using domestic technology, may also qualify for support.
Additionally, trade regulations related to environmental, social, and governance (ESG) issues, as well as differentiated financial and tax support for fostering strategic industries, are included. Examples of such measures include imposing costs based on the carbon emissions of imported products or mandating environmental and human rights due diligence and information disclosure for supply chain companies.
Measures by foreign governments that provide subsidies and tax deductions only to companies that meet domestic production or assembly ratios and supply chain requirements for specific industries, such as electric vehicles, batteries, and semiconductors, are also defined as eligible for support.
* This article has been translated by AI.
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