Martial Arts, Trump's Election "Accelerates US-First Policy... Warning Signs for Global Export Companies"

Report on the 2024 US Election and Trade Environment Outlook

With the beginning of former President Donald Trump's term, U.S. trade policy is expected to be strengthened with a focus on domestic interests. As high tariffs targeting China and measures to block circumvention of exports through Mexico are intensified, global export companies, including those in Korea, are likely to face a direct hit.

The Korea International Trade Association (KITA) announced on the 6th, citing the '2024 U.S. Election and Trade Environment Outlook' report from its affiliated research institute, the Institute for International Trade and Commerce, that former President Trump is pushing for a 60% high tariff on Chinese products and the withdrawal of Most Favored Nation (MFN) status. These measures aim to reduce the U.S. trade deficit and contain China, reflecting a policy stance that seeks to revitalize domestic manufacturing and create jobs simultaneously.

Martial Arts, Trump's Election "Accelerates US-First Policy... Warning Signs for Global Export Companies"

On the afternoon of the 6th, citizens at Seoul Station are watching the broadcast of former U.S. President and Republican presidential candidate Donald Trump's victory declaration for the November 5 U.S. presidential election. Photo by Yonhap News

The Trump administration plans to impose high tariffs on Chinese products and implement strong sanctions such as blocking circumvention of exports through Mexico. The U.S. is expected to strengthen efforts to secure national security and economic stability by restricting technology exchanges and investments in strategic industries with China.

There is a high possibility that some policies introduced by the Biden administration in the semiconductor and clean energy industries will be repealed or modified. Former President Trump referred to industrial support policies like the Inflation Reduction Act (IRA) introduced under the Biden administration as a "green scam," suggesting repeal or major revisions. This is expected to deal a significant blow to the clean energy and electric vehicle industries that have grown under the Biden administration. Domestic companies will find it difficult to expect benefits, and it may adversely affect companies that have invested in eco-friendly businesses.

Earlier, former President Trump declared a stance of "favoring only products made in America." He plans to impose a general tariff of 10-20% on overseas-produced goods. The America First policy is expected to lead to a global spread of protectionist trade measures. This policy, which imposes tariffs on all imports regardless of allied countries, could impose a heavy tax burden on major trading partners, including Korea.

Status of U.S. Administration's China Policy Implementation by Department. Provided by the Trade Association

China is likely to retaliate against U.S. tariff measures with counter-tariffs or export-import regulations. This could cause significant disruption to the global trade environment. KITA emphasized that major exporting countries like Korea must establish practical response strategies to prepare for such deteriorating trade conditions.

Cho Sang-hyun, Director of the Institute for International Trade and Commerce at KITA, said, "Although Trump has announced strong tariff measures, there is already a bipartisan consensus in the U.S. on containing China and strengthening domestic-centered policies," adding, "Considering the changed political landscape in Congress, it is necessary to actively monitor trade legislation trends and analyze the practical impact on our trade and investment by sector and measure."

Director Cho continued, "Former President Trump has evaluated Korean companies' investments in the U.S. very positively and expressed high interest in Korea's industrial competitiveness and Korea-U.S. cooperation," and said, "Going forward, KITA will take the lead in helping the U.S. political circles understand and be persuaded of the strategic value of Korea and Korean companies."