US Declaration of War... "Beating China in Semiconductors and Electric Vehicles"

Biden Announces $197 Trillion Investment in Electric Vehicles and $56 Trillion in Semiconductors
Plans Infrastructure Investment Worth 2,500 Trillion Won

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] U.S. President Joe Biden has declared that he will revive the semiconductor, battery, and clean energy industries through a massive infrastructure investment worth $2.25 trillion (approximately 2,537 trillion KRW) and win the competition against China. Although aimed at China, domestic related companies are also expected to be directly and indirectly affected in the process. The current corporate tax rate of 21% will be raised to 28%, which is expected to intensify the tax increase controversy.

On the 31st of last month (local time), President Biden officially announced the infrastructure investment plan in Pittsburgh, Pennsylvania. He emphasized that in addition to improving outdated infrastructure such as roads, bridges, and ultra-high-speed internet, the plan will "lead innovation in semiconductors, batteries, and clean energy to get ahead in the competition with China."

The main points of the plan include △$620 billion for transportation improvements △$650 billion for improving living environments such as clean water supply and ultra-high-speed internet expansion △$580 billion for supporting the manufacturing sector △$400 billion for supporting the elderly and disabled. The investment will be carried out over the next eight years. President Biden also announced that plans for infrastructure investment in education and healthcare will be announced later. Including these amounts, some forecasts suggest the total investment could reach $4 trillion.

Specifically, $174 billion (approximately 197 trillion KRW) will be invested in the electric vehicle sector alone to install 500,000 electric vehicle charging stations. $50 billion (56 trillion KRW) will be allocated to semiconductor production facilities, research and development, and incentives, including the establishment of the National Semiconductor Technology Center (NSTC).

The issue of securing funds for this large-scale investment will be resolved through tax increases. President Biden promised that while the corporate tax rate will be raised, individuals earning less than $400,000 annually will not face additional tax burdens. He also mentioned that tax exemption benefits for fossil fuel companies will be discontinued.

In particular, he expressed the intention to induce the global minimum corporate tax rate to rise from 13% to 21% to standardize corporate taxes between countries. This is interpreted as a measure to respond to the deterioration of the international competitiveness of U.S. companies due to the corporate tax increase.

President Biden described this as "a once-in-a-generation investment in America," emphasizing that it is "the largest U.S. job investment since World War II, creating millions of jobs and good-paying jobs."

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