Quick access to main page (top) Direct access to main contents Quick access to main page (bottom)

Trump’s Win Sparks Fears of Costly Tariffs for Korean Auto Battery Giants

inews24 Views  

The U.S. auto and battery industries are on high alert following Donald Trump’s nomination as the Republican candidate for the U.S. presidential race on Wednesday.

Concerns are mounting that a second Trump administration’s tariff policies could adversely impact South Korean auto battery firms, which heavily depend on exports to the U.S.

The industry is particularly wary of potential changes to the Inflation Reduction Act (IRA) and its subsidy policies implemented under the Biden administration. South Korean companies have made substantial investments in U.S. facilities based on IRA subsidies, and any elimination or reduction of these subsidies would inevitably directly blow their operations.

Yonhap News

Trump, who has branded himself as the “Tariff President,” has pledged to impose a universal basic tariff of 10-20% on all imports and a hefty 60% tariff on Chinese imports. Even a modest 10% tariff would result in substantial cost increases for automakers and battery firms, possibly amounting to trillions of dollars. For example, South Korea’s automobile exports to North America totaled $37 billion last year, a trade facilitated by the duty-free benefits for vehicles produced in Korea under the Korea-U.S. Free Trade Agreement (FTA).

While a full repeal of the IRA seems unlikely, reduced electric vehicle (EV) subsidies are possible. In Georgia, Hyundai Motor Group operates a dedicated EV plant, MetaPlant America (HMGMA). Under the IRA, U.S. buyers of domestically produced electric vehicles were eligible for subsidies up to $7,500 per vehicle, but the future of these incentives is now uncertain.

South Korean battery companies, including LG Energy Solution, SK On, and Samsung SDI, are deeply invested in the U.S. market and dependent on IRA subsidies. In the third quarter alone, LG Energy Solution received 448.3 billion won, and SK On received 60.8 billion in Advanced Manufacturing Tax Credits (AMPC). Samsung SDI, which entered the U.S. market later, is expected to expand its AMPC scale starting next year.

However, most experts believe a complete repeal of the IRA would be challenging, as it requires congressional approval, and most federal lawmakers associated with IRA beneficiary states are Republicans. Analyst Joo Min Woo of NH Investment & Securities pointed out that Trump failed to repeal Obamacare during his first term. However, if repealing the IRA proves difficult, Trump could use executive orders to tighten conditions for subsidies or tax credits, effectively reducing the budget.

Experts stress the need for swift action under Trump’s presidency. Jo Cheol, a senior researcher at the Korea Institute for Industrial Economics and Trade, advises companies to consider alternatives. “We need to refocus on areas like plug-in hybrids, which have seen waning domestic interest. The battery industry should also explore ways to stimulate demand in sectors beyond electric vehicles, such as energy storage systems (ESS) and ships,” Jo said.

inews24
content@viewusglobal.com

Comments0

300

Comments0

[BUSINESS] Latest Stories

  • U.S. Interest Rates Drop—Is the Fed Signaling More Relief Ahead?
  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Stellantis Plans 1,100 Layoffs in Ohio, Cites Need to ‘Regain Competitiveness’
  • Google’s AI Push in Oil-Rich Saudi Arabia Sparks Climate Concerns

Weekly Best Articles

  • Putin Hints at Joint Military Drills with North Korea: ‘Why Not?’
  • U.S. Interest Rates Drop—Is the Fed Signaling More Relief Ahead?
  • With Trump Back, Kim Jong Un Holds the Cards in U.S.-North Korea Talks
  • Trump’s Win Sparks Fears of Costly Tariffs for Korean Auto Battery Giants
  • Military Leak on Google Maps? Ukraine Raises Security Concerns
  • North Korean Troops Face Heavy Losses in Clashes with Ukraine, U.S. Confirms
  • Russia’s Secret Weapon? North Korean Troops Reported in First Ukraine Clash
  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Will Trump’s Trade Promises Slam South Korea’s Exports? Bank of Korea Thinks So
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Will Kim Jong Un Congratulate Trump on His Return? North Korea’s Response in Question

You May Also Like

  • 1
    Dodgers Manager Hints at Top Picks for Next Season—Any Big Names Returning?

    SPORTS 

  • 2
    South Korea Eyes Military Cooperation with NATO as North Korea Threatens Ukraine Stability

    LATEST 

  • 3
    U.S., South Korea, and Allies Warn of Russia-North Korea Nuclear Tech Transfer

    WORLD 

  • 4
    China Reacts to Trump’s Victory: ‘Respecting the Choice of the American People’

    LATEST 

  • 5
    South Korean President Issues Rare Apology, Admits to 'Oversight and Lack of Virtue'

    LATEST 

Popular Now

  • 1
    Harris Acknowledges Election Loss, Calls for Unity in Concession Speech

    WORLD 

  • 2
    In 12-Minute Call, Yoon Praises Trump, Eyes New U.S.-Korea Partnership

    LATEST 

  • 3
    China’s Famous Mountain Boulder Turns Out to Be Fake

    DEBATE 

  • 4
    Salmon Sperm for Skin? Brazilian Model Swears by This Pricey New Trend

    LIFESTYLE 

  • 5
    Massive DDoS Attack Cripples South Korea’s Defense Site—North Korea or Russia?

    ASIA 

Weekly Best Articles

  • Putin Hints at Joint Military Drills with North Korea: ‘Why Not?’
  • U.S. Interest Rates Drop—Is the Fed Signaling More Relief Ahead?
  • With Trump Back, Kim Jong Un Holds the Cards in U.S.-North Korea Talks
  • Trump’s Win Sparks Fears of Costly Tariffs for Korean Auto Battery Giants
  • Military Leak on Google Maps? Ukraine Raises Security Concerns
  • North Korean Troops Face Heavy Losses in Clashes with Ukraine, U.S. Confirms
  • Russia’s Secret Weapon? North Korean Troops Reported in First Ukraine Clash
  • Trump’s Win Sends Japanese Stocks Soaring, While China Feels the Squeeze
  • Will Trump’s Trade Promises Slam South Korea’s Exports? Bank of Korea Thinks So
  • Trump’s Victory Could Reshape the Chip Industry – Here’s Why South Korea Is Worried
  • China Deepens Financial Ties with Saudi Arabia, Could Threaten U.S. Dominance
  • Will Kim Jong Un Congratulate Trump on His Return? North Korea’s Response in Question

Must-Reads

  • 1
    Dodgers Manager Hints at Top Picks for Next Season—Any Big Names Returning?

    SPORTS 

  • 2
    South Korea Eyes Military Cooperation with NATO as North Korea Threatens Ukraine Stability

    LATEST 

  • 3
    U.S., South Korea, and Allies Warn of Russia-North Korea Nuclear Tech Transfer

    WORLD 

  • 4
    China Reacts to Trump’s Victory: ‘Respecting the Choice of the American People’

    LATEST 

  • 5
    South Korean President Issues Rare Apology, Admits to 'Oversight and Lack of Virtue'

    LATEST 

Popular Now

  • 1
    Harris Acknowledges Election Loss, Calls for Unity in Concession Speech

    WORLD 

  • 2
    In 12-Minute Call, Yoon Praises Trump, Eyes New U.S.-Korea Partnership

    LATEST 

  • 3
    China’s Famous Mountain Boulder Turns Out to Be Fake

    DEBATE 

  • 4
    Salmon Sperm for Skin? Brazilian Model Swears by This Pricey New Trend

    LIFESTYLE 

  • 5
    Massive DDoS Attack Cripples South Korea’s Defense Site—North Korea or Russia?

    ASIA 

Share it on...