"'America First' Trump 2.0 Era Korea, Must Pursue Both Response and Cooperation"

As the "Trump 2.0 era," which advocates for American prioritization, approaches, voices have emerged calling for the domestic industry to actively respond while simultaneously pursuing cooperation.

President-elect Donald Trump of the United States. Yonhap News

On the 18th, Cho Cheol, Senior Research Fellow at the Korea Institute for Industrial Economics and Trade, explained at the "Trump 2.0 Era: Seeking Strategies for the Korea-US Alliance and Trade" forum held at the National Assembly Members' Office Building, "South Korea ranks 8th among the countries with trade deficits with the United States, which is the top concern of President-elect Donald Trump," adding, "43.7% of overseas direct investment, amounting to $63.4 billion (as of the end of 2023), is concentrated in the United States."

Research Fellow Cho also stated, "Investment in the U.S. has significantly increased, especially in semiconductors, secondary batteries, and electric vehicles, with a high concentration in the United States manufacturing sector."

Regarding President-elect Trump's key industry pledges and positions, he emphasized, "There is a perception that the transition to electric vehicles in the automotive industry is disadvantageous to the United States," and "He has stated that a 100% tariff will be imposed on vehicles produced outside the U.S." On the impact of the U.S. presidential election results on the Korean automotive industry, he analyzed, "As the electric vehicle market contracts, domestic and foreign investments will be adjusted, and repurposing of electric vehicle factories will be inevitable," adding, "A contraction in automobile exports and an expansion in exports of substitute parts for Chinese volumes are expected."

Regarding the impact on the semiconductor industry, he explained, "The possibility of reducing subsidies or tax credit benefits aimed at early establishment of advanced manufacturing bases and ecosystems is low."

He diagnosed the direction of South Korea's response, stating, "Samsung Electronics' international political risk is lower compared to China's SMIC and Taiwan's TSMC, but it is disadvantageous in securing advanced process foundry orders, so securing local customer orders and early completion and stabilization of facilities are urgent." He also said, "Efforts should be made to ensure that Korean companies can benefit if the U.S. expands fabless tax credits (25%)," and added, "Support levels for our companies' facility investments should be strengthened, and regulations should be eased to shorten construction periods (工期)."