Companies on Alert for Biden's Pledges: Secondary Batteries 'Smiling' While Fossil Fuels 'Gloomy'

Weather Forecast by Industry Sector in Korea Related to Biden's Pledges

[Asia Economy Reporter Changhwan Lee] As the likelihood of Democratic candidate Joe Biden winning the U.S. presidential election increases, domestic companies are also on high alert.

According to the industry on the 6th, a common concern among companies currently operating in the U.S. is the increase in corporate tax. This is because Biden has pledged to raise the top corporate tax rate from 21% to 28% and gradually increase the minimum wage.

An executive from a major domestic company said, "If Biden becomes the U.S. president, he will push for a corporate tax hike, so Korean companies, including our company operating in the U.S., are unlikely to avoid some negative impact."

In particular, the industry expects that large Korean conglomerates such as Samsung Electronics, Hyundai Motor, and LG Electronics, which generate significant sales in the U.S. market, could experience considerable profit declines.

While companies are expected to be affected in some form, the impact varies by industry. Some sectors clearly stand to benefit from Biden's pledges, while others face higher risks of damage.

Representative beneficiary companies are those in the eco-friendly sector. Biden announced a $2 trillion plan for investment in green energy and infrastructure. He pledged to rejoin the Paris Climate Agreement immediately upon taking office and to push for achieving net-zero carbon emissions by 2050.

Accordingly, companies involved in secondary batteries, hydrogen vehicles, electric vehicles, wind power, and solar energy are receiving significant market attention. Especially, Biden’s plan to switch government transportation to electric vehicles and expand 50,000 EV charging stations across the U.S. has raised expectations for the battery-related industry.

Leading Korean companies in the global secondary battery market, such as LG Chem, SK Innovation, and Samsung SDI, are internally very optimistic about the Biden administration’s policies.

The Korea Institute for Industrial Economics and Trade analyzed, "Biden’s expansion of clean energy is the most distinctive policy compared to the Trump administration, which emphasized traditional fossil fuels," adding, "There could be benefits in the battery sector closely linked to eco-friendly energy."

As the use of eco-friendly energy increases, traditional energy sectors like fossil fuels and internal combustion engine companies are concerned about damage. Biden has stated he will eliminate subsidies for fossil fuels. Refining, chemical, and internal combustion engine automobile companies are worried about adverse effects.

Seonghyun Hwang, Senior Researcher at Eugene Investment & Securities, explained, "If Biden is elected, the fossil fuel industry could shrink due to subsidy elimination, increased power generation costs, and stricter regulations."

The semiconductor, IT, and steel sectors have mixed positive and negative aspects. Biden is expected to continue regulations against China, similar to former President Donald Trump. The ongoing U.S.-China trade conflict may lead to contraction in related electronics industries.

Tax increases are also a burden. Biden has announced tax hikes not only on corporations but also on individuals, raising concerns about reduced consumption. On the other hand, there is potential for indirect benefits through competitor regulations such as Huawei sanctions.

An executive from a major domestic IT company said, "If Biden becomes president, IT and electronics companies have mixed positive and negative factors, so we do not expect a significant impact."

This content was produced with the assistance of AI translation services.