"How to Prepare for the US Presidential Election"… KOTRA Releases 'Post-Election' Economic Policy Outlook Report

Analysis of Economic and Trade Directions Following the US Presidential Election Results to be Announced on the 1st
Policy Analysis and Market Entry Strategy Report to be Published After the Winner is Confirmed

[Asia Economy Reporter Kim Ji-hee] KOTRA announced on the 1st an analysis of the economic and trade directions following the results of the U.S. presidential election to be held on the 3rd. Utilizing local networks such as the North America Regional Headquarters and the Washington Trade Center, this survey examined the policy directions of the two candidates, Trump and Biden.

First, Trump's economic pledges are broadly divided into 'economic recovery through additional tax cuts and expanded infrastructure investment' and 'reshoring incentives for job creation and manufacturing revival.' Specifically, he proposed ▲permanent enactment of the 2017 Tax Reform Law and additional tax cuts ▲support for the establishment of one million small and medium-sized enterprises ▲tax credits for reshoring companies ▲regulations on companies operating in China and reclaiming jobs.

Trump plans large-scale infrastructure investments centered on advanced industries to secure U.S. technological superiority. Externally, the 'Trump-style fair trade' policy through international system manipulation is expected to continue. Unilateral trade measures such as 'tariffs first, negotiations later,' implemented regardless of alliances, are also expected to persist.

Biden criticizes the current Trump administration for economic recession, inadequate response to COVID-19, and increased international order confusion, emphasizing a 'changing America.' To this end, he prioritizes rebuilding the middle class through active fiscal spending. Specific pledges include ▲raising the minimum wage ▲progressive tax reform ▲improving labor rights ▲ensuring equal educational opportunities ▲healthcare system reform.

Domestically, Biden plans massive investments in infrastructure and R&D to achieve an eco-friendly innovative economy represented by the Green New Deal. Externally, he advocates abandoning Trump-style unilateralism, restoring the functions of the World Trade Organization (WTO), and participating in comprehensive multilateral trade agreements.

KOTRA forecasts that regardless of who wins, it will be difficult to immediately return to free trade given the current social and economic conditions. Trump is expected to strengthen unilateral import restrictions using tariffs, and the U.S.-China technological cold war and trade disputes are likely to intensify. Biden emphasizes a 'grand strategy' encompassing industry, economy, and diplomacy centered on national interests, but is also expected to check China through cooperation with allies.

Accordingly, KOTRA advised domestic companies to prepare strategies tailored to each potential winner. In the case of Trump's re-election, opportunities may arise from Korea's reflexive benefits due to China containment, and maximizing local market entry by leveraging expanded infrastructure investment and domestic company preference trends. If Biden wins, institutional reforms of the WTO, discussions on digital service taxes, and accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are expected to be actively pursued, potentially broadening the scope of Korean companies' economic activities in the U.S.

However, regardless of the election outcome, the trend of the U.S.-China technological cold war is expected to continue. Since decoupling of the U.S. and Chinese economies is impossible, domestic companies must create niche opportunities through strategies such as technology investment, investment entry, and mergers and acquisitions based on analysis of the materials, parts, and equipment value chain.

Kwon Pyung-oh, President of KOTRA, said, “Although the U.S. market is expected to expand regardless of which candidate wins, promising industries will differ depending on the economic and trade policies of the candidates. We will promptly support the local market entry of our companies by establishing customized strategies according to the election results.”