Customs taxes: South Korea is preparing a support of $ 5 billion for the semiconductor industry and invokes “increasing uncertainty”
In a TSMC factory, photo: Taiwan semiconductor Manufacturing
The South Korean government announced on Tuesday that it intends to inject addition to $ 4.9 billion in the semiconductor industry, invoking the growing uncertainty 'to which this key sector is related to US customs duties, AFP reports.
“An aggressive budget investment plan has been provided to help local companies to meet the increasing challenges of the World Semiconductors' race,” the South Korean Ministry of Finance said in a statement.
South Korea exports a large part of its production to the United States, and its crucial semiconductor and car sectors would suffer a lot from 25% customs duties that President Donald Trump threatens to impose.
South Korea hosts, among others, Samsung and SK Hynix chip giants.
'In order to favor a dynamic ecosystem, led by the private sector, for innovation and semiconductor growth, the government will increase its investments in the sector from 26,000 billion won ($ 18.2 billion) to 33,000 billion won ($ 23.1 billion)', in addition to $ 4.9 billion, the ministry explained.
On April 2, the US president announced a number of new customs duties concerning his main trading partners, including a 25% tax on South Korean exports, before suspending their implementation for 90 days.
However, 'Customs taxes targeting specific sectors such as semiconductors and pharmaceuticals remain on the horizon', insisted the Minister of Finance Choi Sang-Mok during a meeting.
“This grace period offers a crucial window to strengthen the competitiveness of South Korean companies against the background of escaping the world commercial tensions,” he added.
The package includes financing for the development of infrastructures and human resources.
The aid plan is part of a revised budget proposal, increased by 12,000 billion won ($ 8.4 billion), and is to be subject to vote in Parliament.
The announcement of customs duties, presented by Donald Trump as a way to remedy the American commercial deficit, shook world stock markets and emphasized concerns about global growth.
The US commercial deficit with South Korea was $ 66 billion last year for goods exchanges.
Last week, the South Korean government has already revealed a $ 2 billion emergency package to help car manufacturers cope. (Agerpres)
