(US election) Trump-S Korean industries
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| ▲ People watch live coverage of former U.S. President Donald Trump delivering a victory speech for his successful reelection being aired on television at Seoul Station on Nov. 7, 2024. (Yonhap) |
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| ▲ This image produced by Yonhap News TV shows the corporate logos of Samsung Electronics and SK hynix. (PHOTO NOT FOR SALE) (Yonhap) |
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| ▲ This file photo provided by Hyundai Motor Group shows Executive Chair Euisun Chung delivering a speech at a groundbreaking ceremony for Hyundai Motor Group Metaplant America in Brian County, Georgia, on Oct. 26, 2022. (PHOTO NOT FOR SALE) (Yonhap) |
(US election) Trump-S Korean industries
(US election) S. Korean industries bracing for possible fallout in U.S. businesses after Trump reelection
By Chang Dong-woo
SEOUL, Nov. 7 (Yonhap) -- South Korean industries are bracing for the potential fallout in their American businesses amid an anticipated shift in Washington's economic and trade policies following the reelection of former U.S. President Donald Trump, according to industry observers Thursday.
In particular, industries here are closely watching the possibility of Trump reducing or eliminating the CHIPS and Science Act and the Inflation Reduction Act (IRA), centered on advanced technologies and clean energy sectors.
An industry observer noted that the CHIPS Act was first pursued during Trump's first term and passed with bipartisan support, and it "could be kept in place even during Trump's second term."
He, however, noted, "The executive branch could take actions that might alter the implementation of the law without infringing on powers of U.S. Congress."
Samsung Electroncis Co. is currently building a US$17 billion semiconductor plant in Taylor, Texas, with operations set to begin in 2026. It plans to invest a total of $45 billion in the U.S. by 2030.
SK hynix Inc. has pledged to invest $3.87 billion in an advanced packaging plant for AI memory chips in West Lafayette, Indiana.
The companies have been promised subsidies under the CHIPS Act.
The battery industry is set to attend a meeting chaired by the trade minister on Friday to discuss specific strategies in response to the U.S. presidential election.
South Korean battery makers have also made heavy investments to expand production bases in the U.S. to qualify for the advanced manufacturing production credit benefits under the IRA.
As of the third quarter, LG Energy Solution Ltd. received 466 billion won and SK On Co. received 60.8 billion won through the IRA's tax credit program. Without such benefits, both companies would effectively be operating at a loss, according to their officials.
The automotive industry also remains cautious, as the Trump campaign essentially promised to overhaul the current U.S. administration's automobile policies centered on eco-friendly vehicles.
"If the federal mandate for electric vehicles is repealed, the expansion of South Korean electric vehicle (EV) exports could slow down," an auto industry observer said.
Nearly half of automobiles manufactured in South Korea are exported to the U.S., while Hyundai Motor Group holds the second-largest market share for EVs in America.
In contrast, shipyards anticipate increased business opportunities in the U.S., especially after Trump said in his phone talks with South Korean President Yoon Suk Yeol that America seeks to work with South Korea in the shipbuilding industry.
Industry watchers assess Trump's message to work with South Korean shipyards as stemming from a desire to curb China's rapid growth in the global shipbuilding market.
Until 2021, South Korea's shipbuilding industry had consistently held the global top spot in terms of order volume. Since then, China has led the global market through an aggressive push backed by domestic orders.
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