Trump Inauguration D-Day: impacts of Trump's protectionist policies on S. Korean industries

U.S. President-elect Donald Trump has pledged to promote an America-first trade policy.

So what does that mean for its trade partners like South Korea?

Our business correspondent Moon Hye-ryeon takes a look.

As U.S. President Donald Trump takes office for his second term, his aggressive trade policies, particularly targeting China, are raising concerns worldwide.

Trump has signaled plans for sweeping tariffs, including additional levies on Chinese imports, as part of his broader protectionist strategy – aiming to shift global trade dynamics and strengthen U.S. leverage.

However, such policies have raised alarm in countries like South Korea, heavily reliant on exports.

For South Korea, Trump's trade war with China poses both risks and opportunities across a wide range of industries.

Advanced technology sectors such as semiconductors could face increased barriers to trade as a result of the U.S.-China tensions.

Trump's protectionist policies have also triggered concerns surrounding potential amendments to the Inflation Reduction Act, and whether Samsung Electronics and SK hynix as beneficiaries of the CHIPS and Science Act could be affected.

Experts say that while anything that has already been signed into contract is safe, possible future subsidies could be at risk.

But the U.S. also stands to be negatively impacted as a result.

"If President Trump really wants to use tariffs to induce semiconductor investment in the United States, tariffs have to be higher than 20 percent. And if tariffs for semiconductors do go that high, then it probably will hurt the United States more than help it."

The steel and automobile industries could also be affected as they have been historically important for the U.S. economy.

"They have been really important in the U.S. economy – especially by taking important roles in creating jobs for a long time but have lost their competitiveness in the global market. So the Trump administration is expected to implement higher tariffs on goods that experience large trade deficits."

On the upside, some sectors in South Korea could benefit from Trump's tariffs.

For instance, industries like electric vehicles and batteries, where South Korea has a strong presence, may see increased demand as countries look to diversify their supply chains and reduce reliance on China.

South Korea's plans to boost its eco-friendly vehicle sector and advance battery technology through significant investments as announced by Acting President and Finance Minister Choi Sang-mok earlier last week, may position it as a global leader in these fields.

There is also growing anticipation that U.S. sanctions on China's shipbuilding sector will benefit South Korea's shipbuilding companies as they gain a competitive edge.

As Trump's trade policies take shape, South Korea's industries and government will need to stay agile, balancing the potential risks and rewards in this evolving trade landscape.

Moon Hye-ryeon, Arirang News.