Government Forms Task Force to Prepare for New U.S. Administration...Ministerial and Vice-Ministerial Meetings Expected to Operate

Monitoring Changes in Eco-Friendly Policies and Trade Systems

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] Following the victory of Democratic candidate Joe Biden in the U.S. presidential election, the government has also begun quietly reorganizing its economic policies. The previously operating U.S. election response task force (TF) will be restructured into a new U.S. administration response TF to prepare various countermeasures. Internally, the government has started to prepare for environmental regulations and multilateral trade based on Biden’s campaign promises.

According to the Ministry of Economy and Finance on the 8th, since last month, the Ministry has been monitoring the U.S. election situation through a TF involving relevant departments such as the Economic Policy Bureau, International Finance Bureau, and Foreign Economic Bureau. Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki stated, "Whoever becomes the U.S. president will have a significant impact on the global economy," and added, "We have reviewed scenario-based countermeasures according to the election results."

At meetings involving ministers and vice ministers, economic and trade policies related to the inauguration of the new U.S. administration will be coordinated. At the ministerial level, there is the Foreign Economic Ministers’ Meeting chaired by Minister Hong, and at the vice ministerial level, the Macroeconomic and Financial Meeting chaired by First Vice Minister Kim Yong-beom. However, considering that the U.S. is still experiencing turmoil after the election and that some time remains before the official confirmation of the president-elect and the inauguration of the new administration, the government is carefully monitoring the situation and moving cautiously behind the scenes.

The government is reviewing policies that require coordination across sectors such as macroeconomics, trade, commerce, and finance. A representative issue is environmental regulation. Biden and the Democratic Party hold the position that countries not adhering to climate agreements should face disadvantages such as carbon adjustment taxes and import quotas.

Accordingly, the government is focusing on analyzing the impact on Korean companies if environmental regulations are strengthened and preparing countermeasures. It is positively evaluated that the Green New Deal, a core policy of the Moon Jae-in administration’s Korean New Deal, may align with the new U.S. administration’s eco-friendly stance.

With expectations that Biden will strengthen alliances and restore the multilateral trade system, the government is also reviewing policy preparations. The Korea-Japan relationship may undergo changes following the trend of restoring U.S. allied relations. However, it is analyzed that the U.S.-China relationship will not change significantly, and rather, under the atmosphere of strengthened alliances, Korea may face pressure from both the U.S. and China.

The scale of U.S. economic stimulus measures and exchange rate trends are also areas the government is paying close attention to. The government is monitoring the potential impact of the ongoing post-election turmoil in the U.S. on the fourth-quarter economy. Currently, the government judges that the impact of the post-election turmoil on the economy will be limited.

Although financial markets have not been significantly shaken, if volatility increases, immediate market stabilization measures will be taken. If domestic consumption in the U.S. declines, it could affect the real economy, including exports, but for now, the government expects the impact to be limited.

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