Busan Chamber of Commerce Surveys Business Leaders on Trump’s Second Term Impact on Busan Economy… 82.2% Negative

Local businesspeople expressed concerns about future policy changes by the U.S. administration, anticipating that numerous executive orders based on protectionism?such as the imposition of universal tariffs and policies to curb China?will pose significant obstacles to corporate management following the launch of the second Trump administration.

The Busan Chamber of Commerce and Industry (Chairman Yang Jae-saeng) announced on the 22nd the results of a survey on "Businesspeople's Opinions on the Impact of the Launch of the Second Trump Administration on Busan's Economy," conducted among 100 members of the Busan Chamber of Commerce.

According to the survey, 82.2% of local businesspeople responded that the policies of the second Trump administration would have a negative impact on the regional economy. This is interpreted as mainly due to increased external uncertainty caused by about 100 executive orders, including universal tariffs and high tariffs on China.

Analysis of the Impact of the Trump Administration's Inauguration on Busan Region Companies

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The major policies expected to negatively affect the regional economy were most frequently identified as the introduction of universal basic tariffs (38.7%), raising concerns about reduced profitability and weakened competitiveness of local companies' exports to the U.S. Next were strengthened measures to curb China (21.6%), restructuring of supply chains centered on the U.S. (18.0%), shifts in existing industrial policy directions such as the repeal of the IRA (15.3%), and expansion of pragmatic diplomacy and security policies (5.4%), in that order.

Due to the U.S. administration's strengthened policies to curb China, 70.3% of surveyed companies responded that there would be a negative impact on regional exports. Specifically, 12.9% said very negative, 57.4% somewhat negative, 13.9% no change, 14.9% somewhat positive, and 1.0% very positive. Since sanctions are expected against companies with factories in China or those importing raw materials from China, concerns were raised about adverse effects on local companies' exports.

Regarding industries affected by the Trump administration's policies, 52.9% of respondents identified manufacturing, followed by transportation and warehousing (15.9%), wholesale and retail trade (10.0%), construction (10.0%), information and communications (9.4%), and services (1.2%). Given that the key policies of the second Trump administration emphasize the revival of U.S. manufacturing and protectionism, negative impacts on local manufacturing and transportation industries are expected to be significant.

In response to domestic and international uncertainties, the most common answer was strengthening exchange rate risk management (23.0%). This was followed by reducing production costs and enhancing efficiency (21.3%), establishing response strategies through monitoring and consulting on policy changes (20.2%), diversifying export markets (14.2%), expanding investment in technology and research and development (6.0%), diversifying import sources (4.9%), and restructuring business operations (3.3%). Some respondents (6.6%) also reported difficulties in responding at the corporate level and thus not taking any action.

Regarding government support measures for companies, stabilizing the foreign exchange market was the highest at 30.7%. This is analyzed as due to increased burdens on raw material import prices caused by greater exchange rate volatility amid rising domestic and international uncertainties. Other measures included rapid and proactive policy responses to changes in universal tariffs and trade policies under the second Trump administration (28.1%), tax support such as import tariff reductions (13.5%), strengthened financial support (13.0%), expanded tax benefits for technology-investing companies (7.8%), and increased support for discovering new export markets (6.8%).

A representative of the Busan Chamber of Commerce and Industry's research team stated, "As the global supply chain system faces structural changes due to the second Trump administration's America-first policies, there are limits to responses at the individual company level with weak bargaining power. Therefore, swift and systematic policy support at the government level, including exchange rate stabilization, is necessary."

Busan Chamber of Commerce and Industry.

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