Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-cheol has directly refuted U.S. claims of overcapacity in Korean manufacturing, mounting a response to external economic risks related to the U.S. Trade Act Section 301 investigation.
"Contrary to U.S. claims, our manufacturing facility utilization rates are at appropriate levels," Koo said at the Foreign Economic Ministers' Meeting held at the Government Complex Seoul on Sunday. "Our capital goods exports are also contributing to strengthening U.S. manufacturing competitiveness."
The government plans to accelerate its response to the Section 301 investigation by reinforcing its arguments through a public-private joint task force while continuing consultations with the U.S. side. On forced labor issues, the government will actively explain Korea's position based on compliance with International Labour Organization (ILO) conventions and implementation of the Korea-U.S. Free Trade Agreement (FTA). "We will make every effort to ensure that our companies' interests are not harmed through close consultations with the United States," Koo said.
The government is also addressing Middle East geopolitical risks alongside U.S. trade pressure. "External uncertainties are expanding due to recent heightened geopolitical tensions," Koo said. "We are responding based on four pillars: price stabilization, supply stability, subsidies, and international cooperation." The government is implementing measures including releasing strategic petroleum reserves, diversifying import sources, and cutting fuel taxes, while also preparing additional supplementary measures by referencing responses from major countries.
Along with short-term responses, the government is simultaneously pursuing medium- to long-term strategies. It plans to expand cooperation with emerging markets in Southeast Asia, Latin America, and Africa while broadening its FTA network to diversify supply chains.
The government will also introduce "Korean-style development finance," moving beyond the existing grant-based Economic Development Cooperation Fund (EDCF) to support market expansion through a combination of loans, guarantees, and equity investments utilizing private capital. An inter-ministerial task force will be established in the first half of the year to set up the implementation framework.
Additionally, the government plans to approve an average of 3 trillion won in annual EDCF projects over the next three years, with concentrated investment in strategic areas including artificial intelligence, culture, and supply chains.
"When winds of change blow strong, some build walls while others build windmills," Koo said. "We will build a foundation for medium- to long-term growth while responding to short-term risks."
