The outcome of the tight race between Vice President Kamala Harris and former President Donald Trump could significantly impact South Korean semiconductor, automotive, and battery industries. (Image courtesy of Yonhap)
SEOUL, Oct. 30 (Korea Bizwire) – With the U.S. presidential election just a week away, American protectionist policies appear to be intensifying, creating complex calculations for South Korean companies trying to maintain their competitive edge in a rapidly evolving global market.
While U.S.-China tensions are expected to continue regardless of who wins, the candidates’ divergent approaches to industrial and trade policy are causing concern among Korean businesses.
According to industry sources on October 29, the outcome of the tight race between Vice President Kamala Harris and former President Donald Trump could significantly impact South Korean semiconductor, automotive, and battery industries.
Tensions are particularly high among Korean companies as recent analyses suggest increasing chances of Trump’s victory. The New York Times reported that Trump criticized the CHIPS Act, which provides subsidies to semiconductor companies investing in the U.S., during an interview on October 25.
He suggested implementing high tariffs as an alternative, stating, “That semiconductor deal is terrible… We didn’t have to give them 10 cents. What I’m saying is put very high tariffs on, and they’ll come in and build semiconductor plants for nothing.”
While Trump specifically mentioned Taiwan’s TSMC, concerns are rising about potential impacts on Samsung Electronics and SK Hynix’s U.S. investments.
Samsung Electronics is currently constructing a $17 billion semiconductor plant in Taylor, Texas, aimed to begin operations in 2026, with plans to increase total investment to $45 billion by 2030. SK Hynix announced in April its plan to invest $3.87 billion in West Lafayette, Indiana, for an advanced packaging facility for AI memory.
The U.S. government had previously agreed to provide $6.4 billion in subsidies to Samsung and up to $450 million to SK Hynix. If Trump wins and implements tariffs while reversing Biden’s subsidy policies, Korean semiconductor companies may need to reconsider their investment strategies.
However, some experts suggest that even if Trump wins, drastically changing semiconductor policies won’t be easy. “The CHIPS Act is subject to filibuster and cannot be easily discarded,” said Seo Jungkun, a professor at Kyung Hee University.
“Trump’s mention of the CHIPS Act is more of a rhetoric about Taiwan’s supply chain and U.S. jobs, and it would be difficult to see dramatic changes in semiconductor policy at the legislative level.”
Tensions are particularly high among Korean companies as recent analyses suggest increasing chances of Trump’s victory. The New York Times reported that Trump criticized the CHIPS Act, which provides subsidies to semiconductor companies investing in the U.S., during an interview on October 25. This image, provided by Yonhap News TV on April 12, 2022, shows chip production. (Image courtesy of Yonhap)
The electric vehicle and battery industries are also facing growing uncertainty amid current market challenges. The Korea Institute for Industrial Economics & Trade forecasts positive signals for automotive, battery, and defense industries under Harris, while warning of potential export contractions under Trump’s “America First” policies and universal tariffs.
The report suggests that the fate of the Inflation Reduction Act’s advanced manufacturing credits and purchase subsidies will depend not only on the presidential election but also on the concurrent congressional elections.
Korean battery manufacturers currently rely heavily on the IRA’s Advanced Manufacturing Production Credit (AMPC). LG Energy Solution reported operating profits of 448.3 billion won in Q3 2023, which would have been a 17.7 billion won loss without the 466 billion won in AMPC benefits. SK On’s AMPC benefits increased from 38.5 billion won in Q1 to 111.9 billion won in Q2.
Experts note that repealing IRA subsidies would require Republican control of both houses of Congress. “While both parties share an ‘America First’ foundation, their policy differences have widened since the 2020 election,” said Kim Bong-man, director of international affairs at the Korea Enterprises Federation.
“Particularly with their divergent energy policies, industry-specific preparation is necessary.”
The Korean government plans to actively engage with major U.S.-investing companies and economic organizations through channels like the Global Trade Strategy Council to address trade uncertainties.
Trade Minister Jung In-gyo emphasized at a recent trade policy advisory committee meeting in Seoul, “Regardless of the election outcome, we will work to strengthen advanced industry cooperation and supply chain partnerships through established cooperation channels.”
Kevin Lee (kevinlee@koreabizwire.com)
