[U.S. Midterm Elections: A Day of Reckoning] Hegemonic Pressure Set to Intensify After Election... South Korean Industries on Edge

Pressure on Trading Partners Could Intensify After the Election
Industry Impact to Vary Depending on the Interests of Both Parties
Auto Tariffs Could Be Adjusted; China Semiconductor Controls Could Tighten

There are predictions that the Trump Administration could step up tariff pressure if Republicans lose the U.S. midterm elections. Analysts say a Democratic takeover of Congress may not lead to lower tariffs on South Korean products, but instead could prompt tighter trade restrictions, such as export controls on semiconductor shipments to China.

Tariff Relief Unlikely Even if Congress Changes Hands...Trade Pressure Could Intensify

On Nov. 3, trade experts said they were watching for the possibility that the Trump Administration could increase pressure on trading partners after the election to highlight its achievements in trade.

"The administration has pressured numerous countries so far, but its results have not been clearly demonstrated. Under these circumstances, there seems to be a considerable possibility that it will bring tariff issues back to the forefront," said Jeong Ingyo, former head of the Office of the Minister for Trade at the Ministry of Trade, Industry and Energy. "The pressure will by no means ease," he said.

The outlook for tariff relief remains uncertain, as Democrats also prioritize protecting domestic industries and countering China. Tariffs imposed under Section 232 of the Trade Expansion Act and Section 301 of the Trade Act on products such as steel and automobiles are executive actions based on authority delegated by Congress, making them difficult to change based on election results alone.

"Economic security and competition for leadership in advanced industries are structural issues that will persist even if the opposition becomes the majority party. These policy priorities were already evident under the Biden Administration, so the overall direction is likely to remain unchanged," said Jeong Hyeongon, a senior research fellow at the Korea Institute for International Economic Policy.

Automotive and Steel Tariffs Likely to Remain...Possibility of Tighter Semiconductor Controls on China

The impact is expected to vary by industry, depending on the positions of the two parties and the interests of their constituencies. Calls for tariff adjustments may emerge in the automotive industry, but analysts say relief for steel is unlikely, given strong support for maintaining tariffs among Democrats as well.

The automotive industry believes that uncertainty has eased considerably following the 15% tariff agreement between South Korea and the United States in July 2025 and South Korea's plans for investment in the United States. Even if Democrats take control of Congress, repealing the tariffs would remain a high bar. If the president vetoes a bill to repeal them, more than two-thirds of both the House and the Senate would have to vote in favor to override the veto. However, policies favorable to electric vehicles and other environmentally friendly vehicles could gain traction.

"Views on automobiles differ even among Democrats, but some Democratic lawmakers from Michigan believe that 15% tariffs on vehicles from South Korea, Japan, and the European Union (EU) do not help protect U.S. automakers. Depending on the circumstances, pressure to adjust the tariffs could emerge," said Shin Wongyu, head of the Global Economy Team at the Korea Economic Research Institute. By contrast, he said, "Support for maintaining steel tariffs is stronger than expected among Democrats, particularly unions and representatives from steel-producing districts, so relief is unlikely even if the balance of power in Congress changes."

Export controls on China could be tightened in the semiconductor and artificial intelligence (AI) sectors. Congress could rein in the flexibility the Trump Administration has shown in granting export licenses during U.S.-China negotiations. "Bipartisan legislation to check the Trump Administration's flexibility in approving exports of Nvidia chips during U.S.-China negotiations has already been introduced. If Democrats take control of the House, oversight of export licenses and demands for public disclosure are likely to intensify," Shin said.

Hopes for Progress on Shipbuilding Cooperation...Battery Industry Watching ESS Demand

The U.S. Capitol in Washington, D.C. Yonhap News.

The MASGA (Make American Shipbuilding Great Again) project, a South Korea-U.S. shipbuilding cooperation initiative, could gain momentum as congressional discussions gather pace after the election. One model under discussion is to procure icebreakers from Finland, receive technology transfers, and then build subsequent vessels in the United States.

However, the direction of sanctions by the Office of the U.S. Trade Representative (USTR) against China's shipbuilding and shipping industries remains a variable. The Trump Administration deferred the application of related measures last month, in October 2026, and subsequent decisions could affect South Korea's shipbuilding industry as well. "We expect the overall direction of MASGA to remain unchanged whether Republicans win or lose the election," said Lee Eunchang, a research fellow at the Korea Institute for Industrial Economics & Trade. "However, President Trump could make policy decisions in an unexpected direction depending on the election results," he cautioned.

The battery industry believes the election results will have a limited impact. Since the start of the second Trump Administration, the center of battery demand in the United States has shifted from electric vehicles to energy storage systems (ESS). Analysts say demand for ESS, which is needed to stabilize the power grid and integrate renewable energy, will persist even if Democrats take control of the House. However, ESS demand could fall in the short term if construction of AI data centers is halted in districts where Democrats win.

This content was produced with the assistance of AI translation services.