Martial Arts, Trump 2nd Term Trade 'STORM' Keyword Presented... "Expansion of Car and Semiconductor Regulations"

Security, Tariffs, Overcapacity, Resources, Manufacturing (S·T·O·R·M)
"Expansion of Trade Expansion Act Section 232 and Trade Act Section 301 to Automobiles and Semiconductors"

As the second term of the Donald Trump administration is set to launch on the 20th (local time), an analysis suggests that economic security, tariffs, oversupply from China, new weaponization of resources, and manufacturing revival will dominate this year's trade environment. There is also advice that the U.S. government may expand the existing Trade Expansion Act Section 232 and Trade Act Section 301 to include automobiles, legacy semiconductors, and more.

On the 12th, the Korea International Trade Association's International Trade and Commerce Research Institute published a report titled "2025 Global Trade Environment Outlook." It presented the acronym "STORM," derived from the initial letters of economic Security, Tariffs, Overcapacity from China, Resource new weaponization, and Manufacturing revival, as the key factors shaping this year's trade environment. The message conveyed is that this year will be like a storm of turbulent waves for companies.

The report stated that among the five factors, tariffs attract the most attention. It is expected that Trump will take aggressive tariff measures such as universal tariffs, reciprocal tariffs, and high tariffs on China as soon as his term begins. In particular, regarding the universal tariff pledged in his election campaign, it is highly likely that he will impose it using the International Emergency Economic Powers Act (IEEPA). Instead of applying it to all items, specific countries and products may be designated to induce the counterparties to reduce tariffs. It added that the existing Trade Expansion Act Section 232 and Trade Act Section 301 measures could be expanded to cover items such as automobiles and legacy semiconductors.

Regarding China, high tariffs such as anti-dumping duties and countervailing duties are expected to be imposed. The scope of subsidies, which are the basis for imposing countervailing duties, has been expanded to create a legal basis to define subsidies that the Chinese government has recently provided directly or indirectly to third-country companies as "cross-border subsidies." For raw materials and related products in an oversupply state, anti-dumping duties may be imposed using the "Particular Market Situation (PMS)" clause.

Anti-dumping duties are imposed based on the difference between export prices and normal prices in the export country's domestic market. PMS allows the U.S. Department of Commerce to exercise discretion to determine normal prices when it is difficult to calculate them due to special market situations such as overproduction or government subsidies in the exporting country. This means that the Department of Commerce uses PMS as a basis for imposing high anti-dumping duties. The report anticipates that if U.S. tariff imposition becomes a reality, China will respond by restricting exports of key minerals it possesses, such as gallium, germanium, and graphite.

U.S. tariff measures will continue alongside efforts to foster regional manufacturing. Rather than subsidies like the Biden administration's "carrot" policies such as the Inflation Reduction Act (IRA) and the CHIPS Act, it is expected to strengthen manufacturing supply chains by using "sticks" such as high tariffs. The strategy is to build high tariff barriers to encourage domestic and foreign companies to expand investment in the U.S. to avoid tariff burdens. Along with U.S. President-elect Trump, European Commission President Ursula von der Leyen, who has also succeeded in securing a second term, plans to promote policies to revive European manufacturing through the EU Semiconductor Act and the Green Deal industrial plan.

The report suggested utilizing individual company tariff exemption procedures to minimize the negative impact of U.S. tariff measures. It is believed that, as in the first Trump administration, the U.S. may again exempt individual tariffs for friendly companies. It advised actively persuading the U.S. of the contribution of Korean companies to the U.S. manufacturing supply chain and job creation.

Cho Sung-dae, head of the Trade Research Office at the Korea International Trade Association, said, "Due to the strengthening of protectionism and competition among countries for support policies to revive manufacturing, the uncertainty for our export companies will be higher than ever this year," adding, "It is necessary to strive to turn the crisis into an opportunity by diversifying export markets and enhancing the status as an alternative to China."

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