[The Editors' Verdict] The Trump Premium

President Donald Trump Premium

Korean Companies Thrive Amid Global Uncertainties

Sustainability Remains Uncertain

Junho Hwang, International Chief Editor

"It could be described as a kind of Trump premium."

A former high-ranking Ministry of Trade, Industry and Energy official I recently met offered this assessment regarding the success of Korean companies following the start of President Trump's second administration.

President Trump's aggressive tariff policies during his tenure, along with the Iran war that began this year, have cast a long shadow over the global economy. However, in sectors such as semiconductors, shipbuilding, defense, power equipment, nuclear energy, and construction, the value of major Korean companies has actually risen. Some companies have even posted unprecedentedly strong results.

This outcome is the result of several factors: President Trump's policy direction of 'onshoring,' the astronomical investments promised by domestic companies, the United States' national survival strategy of 'securing physical manufacturing bases' to keep China in check, and the cooperation of the Korean government. Since the release of the "Joint Fact Sheet," the final product of the U.S.-Korea tariff and security investment negotiations in November last year, Korea has taken on the role of the most reliable overseas supply chain for the United States.

At the "Forum on Resource Geopolitical Engagement (FORGE)" launched in February, Korea took on the critical role of enhancing transparency in the supply chain for key minerals. Recently, as the U.S. Forces Korea formalized plans to use Korea as a "Regional Sustainment Hub (RSH)," the door has opened for Korean defense companies to participate extensively in the maintenance, repair, and overhaul (MRO) of U.S. military weapons systems.

Whether the Trump premium can be sustained remains in question. President Trump has repeatedly and openly voiced dissatisfaction with Korea whenever the opportunity arises. In January, he threatened to restore a 25% tariff on automobiles, citing delays in Korean investments in the United States. He also criticized Korea as "an ally that doesn't help us" after Korea hesitated to commit troops to the Iran war. When a Korean ship was attacked in the Strait of Hormuz recently, he immediately blamed Iran and pressured Korea to participate in escort operations without delay.

The United States could immediately wield the "Section 301 investigation" under the Trade Act. It may define domestic network usage fees or government investigations into platform companies such as Coupang as unfair practices and use these as a pretext for trade sanctions.

It is important to pay close attention to Germany, which has already been notified of a U.S. troop reduction and an increase in auto tariffs. Some interpret these measures as retaliation against the German Chancellor, who criticized the U.S. for being embarrassed in the Iran war. This analysis is based on President Trump's irrational and impulsive decisions. In reality, however, these steps reflect Trump's longstanding "security business" approach to increasing Europe's share of defense costs. According to Politico, the United States is not withdrawing troops from Germany but is instead planning to relocate them based on factors such as Germany's cooperation in the Iran war and its level of defense burden-sharing.

It is expected that U.S. troop deployments will increase in countries such as Romania and Poland, which have cooperated in the Iran war. Romania allowed the U.S. military to use its air bases for airstrikes against Iran, and Poland is currently covering nearly all the costs for the 10,000 U.S. troops stationed there. If Korea fails to demonstrate its strategic usefulness, it could easily end up in the same position as Germany.

Rather than focusing solely on the value of security, it is essential to prove that Korea is worth the price of receiving security services. Korea must emphasize its irreplaceable role by demonstrating that without Korean technology, there would be significant disruptions to U.S. industrial security.

As the Iran war moves closer to an end, the deadline for President Trump's security bill also draws nearer. While many are celebrating the Trump premium now, this may be the last golden opportunity to prepare for that security bill.

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