Gyeonggawon "Economic and Industrial Restructuring Will Accelerate During Trump Administration"

There is a forecast that if Trump, who announced a large-scale tariff increase policy, takes office as the U.S. president next year, the reorganization of the global economy and industry centered on the United States will accelerate.

The Gyeonggi-do Economic Science Promotion Agency stated in the report "Gyeonggi-do's Response Strategy in the Trump 2.0 Era," published on the 5th, that with the launch of the Trump second-term administration, protectionist measures such as tariffs, tax cuts, and deregulation are expected to further strengthen the U.S.-centered economic and industrial ecosystem.

The report deeply examines the impact of the Trump administration's strong America-first policy on South Korea's economy and major industries, and presents strategic directions for Gyeonggi-do to respond effectively.

The economic policy directions of the Trump administration include ▲strengthening protectionism through the introduction of universal tariffs ▲corporate and income tax reductions ▲deregulation of key industries such as AI and autonomous driving.

Accordingly, the agency expressed concerns that in South Korea, the 'three highs phenomenon' of high exchange rates, high prices, and high interest rates will worsen the livelihood economy, and that exports to the U.S. and China will shrink, weakening overall industrial competitiveness.

Cover of 'Gyeonggi-do Response Strategy in the Trump 2.0 Era' published on the 5th by Gyeonggi-do Economic Science Promotion Agency

In particular, the semiconductor industry is expected to face increased tariff burdens in the general-purpose memory sector, and in the long term, China's self-reliance speed will accelerate, intensifying global technological competition.

The automobile industry is expected to face a double burden due to the possibility of tariff imposition and reduction of electric vehicle subsidies, and especially, the significant deregulation of autonomous vehicles in the U.S. may accelerate a paradigm shift in the automobile industry.

The battery industry is likely to experience setbacks in local U.S. investment due to the reduction of benefits from the Inflation Reduction Act (IRA), and the artificial intelligence (AI) sector may see a widening technology gap due to large-scale U.S. investments and deregulation.

The agency proposed four major strategies to cope with the rapid changes in industries upon the launch of Trump's second term: ▲focused support for the livelihood economy ▲strengthening responses to export crises ▲fostering deep-tech companies and strengthening the advanced industrial ecosystem ▲enhancing crisis response economic diplomacy.

Kang Sung-cheon, head of the agency, emphasized, "With the Bank of Korea forecasting next year's economic growth rate at 1.9%, South Korea's economy and industry are in a very severe situation. It is time to turn the crisis into an opportunity through bold innovation strategies such as discovering new export items and fostering deep-tech startups."

He added, "The agency will spare no effective support to strengthen the global competitiveness of Gyeonggi-do companies amid the rapidly changing trade environment."

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