SEOUL, May 23 – South Korea has vowed to ramp up policy support for its core export industries, including biopharmaceuticals and automobiles, as sweeping U.S. tariffs imposed by President Donald Trump weigh heavily on the trade-reliant economy.
The government said on Wednesday it is preparing sector-specific relief measures in anticipation of further U.S. duties, and is working to support companies considering reshoring production back to South Korea.
“The government plans to prepare in advance for item-specific tariffs, such as pharmaceutical products and semiconductors, and strengthen support for ‘U-turn’ investments,” Acting Finance Minister Kim Beom-seok said at a policy meeting.
Washington’s latest round of tariffs includes a proposed 25% duty on South Korean imports, prompting Seoul to bolster previous aid packages targeting the auto, chip, and SME sectors. The new measures will expand to include biopharmaceutical firms once the full scope of the U.S. tariffs becomes clear, the government said.
Biopharmaceuticals remain a strategic industry for South Korea, with exports in the sector reaching $9.59 billion in 2024. While these account for just 1.4% of total exports, the United States represents the single largest market, taking in 16% of those shipments.
South Korean drugmaker Celltrion (068270.KS) said last week it was deferring a decision on launching U.S. contract-manufacturing operations for six months, citing policy uncertainty and high operational costs in the U.S.
“It is still unclear whether entering the U.S. is the right answer,” said Chairman Seo Jung-jin, noting that nearly 30% of Celltrion’s revenue already comes from the American market.
Meanwhile, the U.S. Food and Drug Administration is conducting a routine inspection of Samsung Biologics’ (207940.KS) production facilities in Incheon through May 27. The company clarified the visit is unrelated to recent surprise inspections ordered by the Trump administration.
Shares of Samsung Biologics jumped more than 5% on Wednesday, helping lift South Korea’s benchmark KOSPI (.KS11) index 1.1%. Celltrion shares edged up 0.5%.
South Korea is also bracing for broader trade fallout. Minister for Trade Cheong In-kyo said Wednesday that exports to the U.S. and China are expected to decline in May, largely due to the U.S. tariffs.
During the first 20 days of May, South Korean exports fell 2.4% from a year earlier, with shipments to the U.S. down 14.6%, driven by declines in autos, auto parts, and steel. This follows an unexpected rise in April, buoyed by demand for semiconductors.
In response, the government has already allocated 28.6 trillion won ($20.6 billion) in support measures to shore up liquidity, expand overseas markets, and incentivize domestic investment by firms with overseas operations.
A July 8 deadline looms for the tariffs to take full effect after a 90-day pause. While Seoul is in technical discussions with Washington this week, Minister of Trade and Industry Ahn Duk-geun warned that a final trade package may be delayed due to political constraints, including a snap presidential election set for June 3.
“South Korea will continue seeking a comprehensive deal to secure exemptions before the July deadline,” Ahn said.
($1 = 1,389.4800 won)
