A view of downtown Seoul with clusters of corporate buildings. (Yonhap)
SEOUL, Aug. 22 (Korea Bizwire) — More than half of middle market enterprises (MMEs) in South Korea are calling for government-led financial and tax support to ease their burdens from U.S. reciprocal tariffs, a survey showed Friday.
According to the Federation of Middle Market Enterprises of Korea (FOMEK), which conducted the survey on 123 exporting firms between July 31 and Aug. 11, 36.6 percent of respondents said the Seoul-Washington tariff deal concluded on July 30 was “somewhat disadvantageous but unavoidable.”
About one in four, or 23.6 percent, of the companies said the deal helped ease uncertainties, while 21.1 percent viewed it as disadvantageous to the Korean economy. Another 18.7 percent said they had no opinion yet.
Under the bilateral agreement, Washington agreed to lower its reciprocal tariff rate for South Korea to 15 percent from the initially proposed 25 percent, in return for South Korea’s US$350 billion investment in the world’s largest economy and purchase of American liquefied natural gas (LNG) and other energy products worth $100 billion.
This photo shows a port in the southeastern city of Busan on April 30, 2025. (Image courtesy of Yonhap)
When asked about the tariff rate that would ensure profitability for U.S.-bound exports, 41.5 percent of respondents answered “5 percent or less,” followed by 25.2 percent saying “10 percent or less” and “15 percent or less” at 21.1 percent.
On the economic impact of the reciprocal tariffs, 32.9 percent pointed to a “decline in export competitiveness,” followed by an “increased need for localization” at 15.5 percent, “no significant impact” 14.3 percent and “improved competitiveness of U.S. export prices compared to competing countries” at 13 percent.
Regarding preferred government support measures, 52.8 percent called for an “expansion of export financing and tax incentives,” followed by “manuals and expert matching for U.S. customs and import procedures” at 16.3 percent and “supplementary measures for industries affected by the negotiation results” 11.4 percent.
“As the U.S. accounts for 16.6 percent of exports by MMEs, mutually beneficial trade relations are crucial to South Korea’s industrial competitiveness,” said Lee Ho-joon, executive vice chairman of FOMEK, urging a practical approach at the upcoming Korea-U.S. summit slated for Monday.
(Yonhap)
