Vice Premier and Finance Minister Hong Nam-ki speaks during a ministerial meeting at the government complex in Seoul on Thursday. (Yonhap)
SEJONG — The Korean government will waive tariffs on part of imports of three gases — neon, xenon and krypton — which are used in semiconductor manufacturing, starting next month.
The decision to cut tariffs for some, but not all, imports of the three gases is part of the government’s countermeasures against the Russian-Ukrainian war, the Finance and Economy Ministry said on Thursday.
Deputy Prime Minister and Finance Minister Hong Nam-ki said the ministry “would implement a zero percent quota on neon, xenon and krypton in April, as these are highly dependent on imports from Russia. and Ukraine”.
While Korea has imposed a 5.5% tariff on the three rare gases, the zero percent ‘contingent’ tariff means there will be temporary action to levy ‘no tariff on a certain portion’ of imports gas for a certain period.
In addition, the so-called “flexible” tariff measures could possibly apply to imports of ferrotitanium and aluminum, lead and copper products, according to the Ministry of Finance.
The ministry is also developing measures to secure corn imports, which represent a large part of the fodder used in the local agricultural sector.
Regarding concerns over energy supply, Minister Hong said the government was in close coordination with the Korea National Oil Corp. to secure international crude import routes.
Hong reiterated that the biggest risk to the Korean economy is the uncertainty and volatility in the global economy, following the Russian invasion of Ukraine and the international community’s action on sanctions against Russia.
“Exports to Russia and Ukraine are down in March. Inflationary pressure is increasing due to soaring international crude prices,” he said. “The possible impacts of long-term conflict are quite worrying.”
The minister also expressed concern about the decline in the value of the Korean currency amid the conflict between Ukraine and Russia.
If the pace of the won’s loss of ground against the U.S. dollar is excessive, the government will step up measures to stabilize the foreign exchange market, he said.
The dollar, which has traded above 1,200 won since Feb. 24, touched 1,245 won on Tuesday. This helps to stimulate and increase consumer prices due to higher import prices.
Since dollar prices remained below 1,150 won a year earlier, more and more companies have faced heavier cost burdens when purchasing raw materials.
Since late February, the government has implemented various emergency plans to support exporting companies and Koreans residing in Russia.
After Korea participated in the financial sanctions against seven major Russian banks, the government is assisting cash transfers to Koreans in close cooperation with Korean commercial banking units operating in Russia.
By Kim Yon-se ([email protected])