KOTRA "Bidenomics, Opportunity for Korean Economy but Threats Like Carbon Tax Introduction Also Exist"

Report Published on "Economic and Trade Policy Outlook and Implications" in the Biden Era

[Asia Economy Reporter Kiho Sung] The economic policy of US President-elect Joe Biden, known as 'Bidenomics,' is seen as an opportunity for the Korean economy in terms of market expansion, but it may pose threats due to its emphasis on environment and labor.

KOTRA analyzed the results of the US presidential and congressional elections, their implications, the new administration's policy directions, and the impact on Korea's trade and investment with the US by major industries in its report titled 'Economic and Trade Policy Outlook and Implications Following the 2020 US Election Results,' published on the 10th.

According to the report, the core of Biden's economic pledge is 'rebuilding the middle class through active fiscal investment.' Following the Democratic Party's control of both the Senate and the House after the Georgia Senate election results on the 5th, the implementation of election pledges is expected to gain momentum.

Biden is expected to appoint progressive figures to accelerate policy execution, focusing on raising the minimum wage, progressive tax reform, enhancing labor rights, ensuring equal educational opportunities, and reforming the health insurance system.

Domestically, the administration plans large-scale investments in infrastructure and research and development (R&D) to achieve an eco-friendly innovative economy such as the Green New Deal. By presenting the Green New Deal as a major economic policy agenda, significant changes in energy, industry, and technology policies are anticipated.

Externally, the administration is expected to restore the functions of the World Trade Organization (WTO), participate in comprehensive multilateral trade agreements, and promote trade order reforms based on cooperation with allies.

The report analyzed that "the implementation of the Biden administration's eco-friendly policies is expected to boost exports of domestic energy equipment and construction machinery." The increase in infrastructure projects will provide market entry opportunities for domestic construction materials, power equipment, and smart system companies.

The report particularly foresaw that if the US and China enter a technological cold war, an international production cooperation system with allies including Korea could be established to counter China in advanced technology and manufacturing sectors. Active response to COVID-19 and the revival of Obamacare are expected to create export opportunities for domestic pharmaceutical technology and generic drugs.

However, concerns have been raised that the US prioritizing environmental, labor, and consumer protection provisions in trade could affect areas related to the Korea-US Free Trade Agreement (FTA). The possible introduction of a carbon border tax is expected to pose difficulties for exports of cement, petrochemicals, steel, and semiconductors.

The report also anticipated that the US supply chain reconstruction policy could negatively impact the overall domestic industry and trade environment. KOTRA President Pyung-oh Kwon said, "As seen in Biden's economic pledge 'Build Back Better,' the US market will expand further," adding, "We will continue to identify opportunities in line with changes in the new administration's industrial, trade, and economic policies."

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