Joe Biden Expected to Win
Democratic candidate Joe Biden is expected to win the U.S. presidential election. The America First policy and trade protectionism of the Trump administration are expected to subside in that Biden supports free trade.
According to Hyundai Research Institute, South Korea’s annual export growth rate is estimated to increase by up to 2.2 percentage points and its upward growth pressure is estimated to rise by up to 0.4 percentage point based on his election instead of the current president’s reelection.
His view on tariffs against China is different from the current president’s and this can have various effects on South Korean industries as well. He is likely to try to limit the influence of China by cooperating with U.S. allies and mentioning human rights, environmental and labor issues whereas the incumbent president did so with unilateral tariffs.
“U.S. tariff rates applied to steel products are expected to be cut, and then Chinese steel can enter the United States with ease,” said a steel industry source, adding, “The current U.S. government imposed high tariffs on Chinese steel, which led to more and more cheap Chinese products in the South Korean market and rapidly intensifying competition, but this is expected to be alleviated.”
The other promising sectors include green industries such as solar and wind power generation and the hydrogen industry. The candidate is planning to invest US$2 trillion for four years in green infrastructure in order to respond to climate change, create more economic opportunities and reduce the carbon emissions of the United States to zero by 2050. His election pledges include more electric vehicles and more renewable energy production as well and South Korean battery manufacturers’ expectations are rising, too.
South Korea, however, may face a dilemma with the United States trying to put pressure on China together with its allies. South Korea may be compelled to choose its side between Washington and Beijing whereas the incumbent president put the same pressure on his own. For South Korea, China is a very important trade partner accounting for one-fourth of its exports.
The leading candidate is considering keeping China in check by re-acceding to the Trans-Pacific Partnership. South Korea may have to decide whether to follow or not.