Former President Donald Trump and Vice President Kamala Harris have presented opposing views on key economic policies such as energy policy and corporate tax rates.
The Korea Economic Association analyzed the platforms of the Republican and Democratic parties, revealing significant differences.
The energy policies were the most contrasting area. The election results will hinder the U.S. energy industry’s forecasts.
The Democratic Party is focused on boosting clean energy investments and reducing oil dependence. Their plan includes strengthening energy efficiency standards and requiring American-made low-carbon materials. This approach is expected to create over 20,000 jobs through the Green New Deal project.
On the other hand, the Republican Party supports increasing production across all energy sources, including oil, natural gas, and nuclear power. They plan to remove energy-related regulations and relax restrictions on nuclear power plants.
The Republicans have emphasized streamlining the energy production permitting process, unlike in the 2020 election, when they promoted clean energy development.
The Republicans did not directly address the Inflation Reduction Act (IRA) subsidies. Instead, they opposed Biden’s mandatory electric vehicle measures and expressed discomfort.
The Korea Economic Association stated, “The complete revoke of IRA subsidies is a scenario that can only occur if the Republicans secure a majority in both the House and Senate. We need to be cautious of the results of the elections.”
As South Korean companies ramp up their investments in the U.S., changes in corporate tax policy are catching attention. The U.S. is set to let its corporate tax rate drop from 35% to 21%, while income tax rates will decrease by 2 to 3 percentage points across various brackets by the end of next year.
The Democrats have explicitly stated their intention to raise the corporate tax rate to 28%. Although the Republicans did not specify a number, they announced a comprehensive tax cut. In an interview last month, Donald Trump noted that he would lower the corporate tax to at least 20% if not 15%.
Both parties have taken a firm stance on China, but their approaches vary in detail.
The Democrats aim to mitigate risks by focusing on controlling China in key advanced technology industries. They intend to impose sanctions in areas such as artificial intelligence (AI), semiconductors, critical minerals, steel, electric vehicles, and batteries while leaving the door open for cooperation in new fields if necessary.
The Republicans have expressed strong intentions for sanctions, including revoking China’s Most Favored Nation status and gradually halting imports of essential goods from China. They would also ban Chinese real estate buyers and prohibit Chinese vehicle importation.
Kim Bong Man, head of the International Department at the Korea Economic Association, noted, “Even the starkly contrasting energy policies expressed by both parties require thorough preparations. Industries such as semiconductors, secondary batteries, automobiles, and corporations must prepare. For sectors with significant investments in the U.S., our government should also respond to potential policy changes.”
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