77% of South Korean Companies Fear Trump’s Win Could Spell Trouble for Trade

In a recent survey, 77% of South Korean companies expressed concerns that the outcome of the U.S. presidential election will hurt the Korean economy and industry. As a result, many firms are now planning to either cut back on research and development (R&D) and capital expenditures (CAPEX) or adopt a cautious wait-and-see approach for the coming year.

On Thursday, the Korea Industrial Technology Association (KOITA) released its “Emergency Industry Perception Survey on U.S. Election Results,” which surveyed 900 South Korean companies with active R&D operations. The survey, conducted after Donald Trump’s electoral victory, underscores heightened worries about the potential for increased U.S. protectionism, America-first diplomacy, and potential disruptions to global supply chains. South Korea, a nation heavily reliant on exports and central to the U.S.-China tech rivalry, could face significant challenges, especially in sectors like semiconductors and batteries.

Among the anticipated policy changes, tariff-related measures emerged as a top concern, particularly regarding possible adjustments to battery and electric vehicle tariffs, with 27% of companies highlighting this issue. Concerns over America-first policies toward China and North Korea followed closely, at 24%.

These concerns are already impacting corporate investment plans. 34% of surveyed companies indicated they would reduce investments next year, while 58% plan to adopt a wait-and-see approach. When asked about urgent government actions needed, 29% of respondents called for increased support for national R&D projects and substantial R&D investment growth. Another 28% emphasized the need for enhanced tax incentives and subsidies for key industries, while 17% stressed the importance of strengthening trade negotiations to alleviate pressures and overcome trade barriers.

Ko Seo Gon, executive vice president of the KOITA, stressed the gravity of the situation: “Given South Korea’s high dependence on exports, U.S. policy shifts could have far-reaching consequences for our industries. To mitigate potential negative impacts, it’s crucial for the government to swiftly implement measures such as boosting R&D investment. Moreover, enhancing our negotiating position with the U.S. is paramount in this critical period.”