As the U.S. presidential election between former President Donald Trump and Vice President Kamala Harris approaches this November, it is predicted that the U.S.-China power struggles over advanced technologies such as artificial intelligence (AI) and semiconductors will intensify regardless of the election outcome. In particular, concerns have arisen regarding the battery industry, where the potential reduction of benefits from the Inflation Reduction Act (IRA) could necessitate proactive measures.
On Monday, the Korea Chamber of Commerce and Industry (KCCI) and the Korean-American Association jointly held the Korea-U.S. Industrial Cooperation Conference at the KCCI.
Experts in the semiconductor field who attended the conference forecast that, regardless of the election results, the U.S. will continue its strategy of countering China and expanding investment in its own technology sectors.
Kwon Seok Jun, a professor at Sungkyunkwan University, emphasized, “AI semiconductors will play a significant role in global competition, and it is important for domestic companies to make strategic decisions considering the rivalry between the Nvidia alliance and the anti-Nvidia alliance” (UA Link).
The Democratic Party advocates for an allied cluster-focused foreign policy to maintain semiconductor hegemony, while the Republican Party emphasizes a domestic-centered approach. Kwon predicted, “If Harris wins, there is a high possibility of strengthening domestic investment incentives through amendments to the CHIPS Act, while if Trump wins, the focus will likely be on reinforcing the guardrail provisions of the CHIPS Act and tightening the requirements for allied countries to receive subsidies.”
Gary Clyde Hufbauer, a Nonresident Senior Fellow of the Peterson Institute for International Economics, stated that AI would be a major focus in the semiconductor industry over the next presidential term. Securing high-performance semiconductors and talent is crucial, and under Trump, policies would likely aggressively prevent China from accessing these resources. He specifically mentioned that graphics processing units (GPUs) and 3D memory chips will be key targets.
Experts also pointed out the need to prepare for the challenges of importing advanced semiconductor equipment into China, regardless of the election results.
Ahn Gi Hyun, the executive director of the Semiconductor Industry Association, warned, “If Trump wins, semiconductor investment support may prioritize domestic companies. Therefore, domestic firms need to monitor the situation and respond proactively to avoid potential harm.” He urged rapid review and passage of special semiconductor legislation within the National Assembly to secure global competitiveness for the domestic semiconductor industry.
Experts expressed heightened concerns about the potential reduction of IRA benefits in the battery sector.
Lukasz Bednarski, author of Lithium: The Global Race for Battery Dominance and the New Energy Revolution, mentioned that the IRA has significantly impacted U.S. manufacturing over recent decades. He noted that while a Harris administration would likely maintain the current battery policy direction, including IRA benefits, a Trump administration could reduce these benefits, adversely affecting Korean battery companies.
He suggested that Korean battery companies could utilize lithium mined by U.S. firms and that collaboration on research and development (R&D) between companies and universities in both countries is essential. Additionally, Korean battery-related startups must connect with U.S. venture capital.
Nevertheless, most experts agree that the U.S. will maintain its decoupling policy toward China in the battery supply chain, regardless of who wins the election.
Hwang Kyung In, a research fellow at the Korea Institute for Industrial Economics and Trade, stated, “Based on this U.S. battery policy direction, we need to focus on internalizing and diversifying sources for battery raw materials and components.”
Park Jae Bum, a senior researcher at POSCO Research Institute, remarked, “The decoupling supply chain policies of both candidates could present opportunities for Korea.” He urged the government to enhance support for Korean companies in securing mineral resources and processing and production of materials to reduce reliance on the Chinese supply chain and become a key partner in the U.S. supply chain.
