Amid rising trade barriers from the United States, Incheon City has rolled up its sleeves to promote management stability for small and medium-sized enterprises (SMEs), the backbone of the local economy. By providing an unprecedented ₩150 billion (approximately $108 million USD) in funding to companies exporting to the U.S. and their related partners, the initiative is expected to revitalize the local economy, which could otherwise shrink due to the deepening U.S.-China trade conflict and the spread of protectionism.

Incheon City announced on the 13th that it will provide approximately ₩150 billion in special funds to stabilize the management and enhance the competitiveness of SMEs exporting to the U.S. This support measure aims to alleviate financial difficulties for local export companies that may arise as the U.S. continues to raise trade barriers, such as imposing tariffs, and to reduce their interest burden, thereby fostering a stable business environment.

Changes in U.S. Tariff Policy and Concerns within Domestic Industries 

Recently, the United States has been strengthening various forms of trade barriers under the pretext of protecting its domestic industries. In particular, moves to impose additional tariffs on specific countries or strengthen non-tariff barriers are significantly impacting global supply chains. Advanced industries, such as semiconductors and pharmaceuticals, which are major export items for the Incheon region, are inevitably more sensitive to changes in U.S. tariff policy. Indeed, there are growing concerns within the industry that these U.S. actions could weaken the export competitiveness of domestic companies and lead to long-term declines in performance.

In this situation, Incheon City's policy is to proactively support companies experiencing management difficulties due to the impact of U.S. tariffs, helping SMEs, the core軸 of the local economy, to grow steadily even amidst uncertain external environments. The scope of this support is considered very broad, as it includes not only companies directly exporting to the U.S. but also their cooperative partners and suppliers. This reflects Incheon City's determination to stabilize the entire intricately linked industrial ecosystem.

Support Scale and Application Method 

The management stabilization fund provided can be up to ₩500 million (approximately $360,000 USD) per company. A particularly noteworthy aspect is the uniform 2.0% interest rate differential compensation for bank loans. This is expected to be an effective way to substantially alleviate the financial burden faced by SMEs in an era of high interest rates. The loan period is a one-year lump-sum repayment, helping companies resolve short-term liquidity issues and focus on normalizing their operations.

Furthermore, the fact that companies currently receiving and repaying management stabilization funds from Incheon City or various districts (gun/gu) are also eligible for this support is welcome news for many companies with funding needs. However, since this funding is not a direct loan or guarantee from the city or districts, companies must directly confirm their final loan eligibility with their commercial bank. Incheon City plans to work closely with financial institutions to ensure efficient fund disbursement and procedures, helping companies secure funds smoothly.

Applications for support begin on the 14th of this month and will continue until funds are exhausted. Companies wishing to apply can submit their applications online through BizOK, Incheon City's customized support system for SMEs. Incheon City plans to ensure rapid review and fund execution.

Expected Effects and Future Plans 

Incheon City's ₩150 billion funding support for SMEs exporting to the U.S. is expected to bring various positive effects beyond simple financial assistance.

First, it will strengthen the management stability of SMEs. By providing stable liquidity to companies that may face financial difficulties due to uncertainties from U.S. trade barriers, it will prevent bankruptcies and enable continuous business operations. Especially, the alleviation of interest burden will provide companies with more room to actively pursue investment and employment expansion.

Second, it will maintain and enhance regional export competitiveness. Incheon is a city with well-developed export industries based on advanced technology, such as semiconductors, pharmaceuticals, and automotive parts. By supporting these companies to stably continue their export activities without being swayed by U.S. tariff policies, Incheon City expects to maintain its overall export volume and further strengthen its competitiveness in the global market.

Third, it will sustain employment and stimulate the economy. Management instability in SMEs directly leads to employment instability. This funding support will provide a foundation for companies to maintain employment instead of laying off employees, and furthermore, to create new jobs. This can contribute to revitalizing the local economy and creating a virtuous cycle that improves citizens' quality of life.

In addition to this funding support, Incheon City plans to closely monitor changes in trade policies of major export destinations like the U.S. and consider preparing additional support measures as needed. Furthermore, it plans to link and promote various programs, such as consulting and overseas marketing support, to help SMEs explore new export markets and diversify their business models.

Attention is drawn to whether Incheon City's proactive support measure will become a crucial turning point for local SMEs to turn crises into opportunities and grow even stronger amidst the rapidly changing global trade environment.