[Economy pick] Where should I go?a breathless sense of industry

[Anchor]
Where should I bounce...a breathless industrial tactile 'clap'

This is because our companies are greatly affected by Trump's economic policy, right?

[Reporter]
Yes, the tension in our companies has increased following Trump's election.

It's because of the U.S. priority that emphasizes the protection of its own companies, and if you look back at the first period, you've set fire to the chimneys of your own factories through so-called reshoring, which brings back American manufacturing companies that have entered overseas.

To this end, it is expected that corporate tax cuts and deregulation will be pursued more boldly.

In 2017, the corporate tax rate for U.S. companies was lowered from 35% to 21%, and this time, it aims to increase the target of not only U.S. companies but also manufacturing companies that produce goods in the U.S. and lower corporate taxes by 15%.

On the contrary, they will basically impose a uniform tariff of 10 to 20 percent on foreign companies, and an average tariff of 60 percent on Chinese products.

Raising tariffs like this is also based on another intention other than protecting domestic companies and securing tax revenues through tariffs.

As it is difficult to export to the United States due to tariffs, it can also be seen as a meaning to just come into the United States and set up a factory without having to suffer outside.

[Anchor]
How much will Korean companies be affected if the Trump administration steps up to the tariff barrier to protect its own companies?

[Reporter]
Of course, no one can know exactly from the current situation, but there is also a pessimistic outlook that annual exports could be reduced by 6% to 7%.

This is an analysis by the Korea Institute for International Economic Policy (KIEP), which estimates that the U.S. imposes 20% tariffs on all countries, which could reduce Korea's total exports by $44.8 billion per year, assuming the worst-case scenario for Korea to lose to other competitors.

However, there is also a prospect that it will not be this far.

Increasing tariffs will not be easy to do because they could raise import prices, trigger inflation in the country, which could lead to lower approval ratings for low-income people, but it remains to be seen how much the second Trump administration will actually raise tariffs.

It is also likely to cut or reduce the execution of subsidies under the IRA law enforced by the Biden administration.

As a result, Korean companies, which have been looking at subsidies and expanding local production facilities, may find it difficult to position themselves.

[Anchor]
However, looking back on the past, there was a fierce dispute with China that was called a trade war, and difficulties are expected in the trade balance, right?

[Reporter]
That's right. Since Trump himself is a businessman, he is very sensitive to profitability and relentless.

There is a strong prospect that the pressure on countries with trade surpluses against the United States will be very severe.

In this case, Korea is also one of the major target countries.

Korea had a trade surplus with the U.S. of about 62 trillion won last year with Korean money, and it is expected that pressure will be inevitable as it has already posted a trade surplus with the U.S. of 56 trillion won until the third quarter of this year.

It is difficult for Trump to change the Korea-U.S. FTA immediately, but there is a good chance that some kind of action will be taken through an executive order.

For this reason, the Korean government also held an economic ministers' meeting this morning, the first day of the election, and let's listen to Minister of Economy and Finance Choi Sang-mok for a moment.

[Choi Sang-mok / Deputy Prime Minister for Economic Affairs] In addition, the political landscape is expected to change significantly as the Republican Party holds the Senate majority in the congressional election. If the policy stance that Trump has emphasized becomes a reality, the impact on our economy is expected to be significant, so the government will take a preemptive and shrewd response with a meeting of economic ministers as the pan-government control tower.