Factbox – What is at risk for Asian companies in the Trump presidency By Reuters
Written by Hyunjoo Jin
(Reuters) – Donald Trump has been elected president of the United States, marking a remarkable comeback four years after being voted out of the White House.
Here’s what Asian companies have invested in the United States, what Trump said about them and what possible changes in US business policy could mean for Asian companies.
SEMICONDUCTORS
Asian chipmakers, led by Taiwan’s TSMC and South Korea’s Samsung Electronics (KS:), have collectively invested at least $117 billion in the US, boosted by the current campaign by US administrations aimed at reducing their reliance on Asia for high quality chips.
In return, they have received or been promised grants and financial aid totaling at least $18.85 billion, according to Reuters figures.
It is not clear whether Trump will cancel the plan, which he called “bad”. He made comments about the campaign that Taiwan should pay for its security and also accused the island of stealing business from American semiconductor companies.
Taiwan’s GlobalWafers said Thursday it expects the subsidy program to continue under the Trump administration.
ELECTRIC VEHICLES
Trump has floated the idea of tariffs of 10% or more on all US imports, a move he says will eliminate the trade deficit.
He has also threatened to impose a 200% tariff on some imported cars, and is very determined to keep cars from Mexico out of the country. The tariff will hit many Asian automakers including Honda (NYSE:) Motor, Nissan (OTC:) Motor and Kia Corp.
Honda CEO Shinji Aoyama warned on Wednesday that the price of cars from Mexico will have a big impact as the company sends 80% of its product there to the US market.
He said that if these measures become permanent, Honda will have to consider switching to the US or another tax-free country later on.
EV BATTERIES
South Korean battery makers and Japan’s Panasonic ( OTC: ), which has several EV battery factories operating in the United States, are now targeting a rollback of President Joe Biden’s signature clean energy policy and loose emissions regulations .
Trump told Reuters in August that he might eliminate the $7,500 tax credit for buying an EV.
Starting in 2023, LG Energy Solution and SK On have received 2.6 billion won ($1.9 million) in US government credits for making battery cells in the United States, according to Reuters calculations based on their stock exchange filings.
Without those production credits, they would have posted losses, the companies said.
However, US restrictions on Chinese batteries may remain in place or be tightened under the second Trump administration, a policy that will benefit rival South Korean manufacturers.
NIPPON STEEL
The US government has not yet approved Nippon Steel’s $14.9 billion bid to buy US Steel, a politically sensitive deal due to opposition from the American company’s labor union.
Trump has said he will block the deal, as he seeks to woo union voters. Biden also said that he is against the takeover.
The Committee on Foreign Investment in the United States said in August that the deal posed a national security risk as it threatened steel imports from key American industries, prompting Nippon Steel to pledge billions in investments in US Steel facilities that would otherwise not work. .
CHINA
Chinese businesses are waiting to see if Trump makes good on his threat to impose tariffs of 60% or more on imports from China, which could start a new trade war reminiscent of the one he raged during his 2017-2021 presidency.
The trade war affected sectors across the board, from vacuum cleaners to machinery, with costs imposed on goods exceeding $200 billion. The Biden administration kept most of the taxes in place.
Many Chinese companies have also been hit by export controls by the Trump administration citing national security concerns, such as Huawei Technologies which was banned from buying high-end chips, crippling its smartphone business.
Other Chinese tech companies targeted include ByteDance and Tencent, whose social media apps TikTok and WeChat were threatened with a US ban.
Some Chinese exporters are making plans to speed up migration or open factories outside China to deal with Trump’s return.
But some Chinese tech executives are betting that Trump’s combative approach may work in their favor, as US efforts to slow China’s technological progress may fail to garner support from other countries.
Nazak Nikakhtar, a Commerce Department official under Trump who knows his current advisers, said he expects the Trump administration to be more aggressive about export control policies toward China.
