Wait begins: A man reads a newspaper in Jakarta. During his campaign, Trump had proposed the idea of a 10% or higher tariff on all goods imported into the United States. — AP
Singapore: Donald Trump has been elected US president, capping a remarkable comeback four years after he was voted out of the White House.
Here is what companies in Asia have invested in the United States, what Trump has said about them and what potential US business policy changes would mean for Asian companies.
Semiconductors
Asian chipmakers, led by Taiwan’s Taiwan Semiconductor Manufacturing Company Ltd (TSMC) and South Korea’s Samsung Electronics, have collectively invested at least US$117bil in the United States, encouraged by the current US administration’s key initiative aimed at lowering its reliance on Asia for high-end chips.
In return, they have received or been pledged grants and financial support amounting to at least US$18.85bil, according to Reuters’ calculation. It’s unclear if Trump would roll back the scheme, which he called “bad”.
He made comments on the campaign trail that Chinese-claimed Taiwan should pay to be protected and also accused the island of stealing business from American semiconductor companies.
Taiwan’s GlobalWafers said yesterday it expected the subsidy programme to continue in a Trump administration.
Electric vehicles
Trump has floated the idea of a 10% or more tariff on all goods imported into the United States.
This is a move he said would eliminate the trade deficit.
He has also threatened a 200% tariff on some imported cars, and is particularly determined to keep cars from Mexico from coming into the country.
The tariff would hit multiple Asian automakers including Honda Motor, Nissan Motor and Kia Corp.
Honda chief operating officer Shinji Aoyama warned on Wednesday that tariffs on vehicles imported from Mexico would have a huge impact as the company sends 80% of its production there to the US market.
He said if such measures became permanent, Honda would have to consider shifting production to the United States or another tariff-free country in the long run.
South Korean battery makers and Japan’s Panasonic, which have multiple electric vehicle (EV) battery factories operating in the United States, are now bracing for a potential roll back of President Joe Biden’s signature clean-energy policy and looser emissions regulations.
Trump told Reuters in August that he may eliminate a US$7,500 tax credit for EV purchases.
Since 2023, LG Energy Solution and SK On have received 2.6 billion won or about US$1.9mil in US federal credits for making battery cells in the United States, according to Reuters’ calculation based on their stock exchange filings.
Without those manufacturing credits, they would have posted losses, the companies said.
However, US restrictions on Chinese batteries may remain in place or toughen under a second Trump administration, a policy that would benefit rival South Korean producers.
Nippon Steel
The US government has yet to approve Nippon Steel’s US$14.9bil bid for US Steel, a politically sensitive deal due to opposition from the US firm’s labour union.
Trump has said he would block the deal, as he has sought to woo union voters. Biden has also said he is opposed to the takeover.
The US Committee on Foreign Investment in the United States said in August the deal posed a risk to national security as it threatened the steel supply chain for critical US industries, prompting Nippon Steel to pledge investments worth billions in US Steel facilities that otherwise would have been idled.
China
Chinese businesses are waiting to see if Trump makes good on a threat to impose tariffs of 60% or more on imports from China, which could kickstart a fresh trade war reminiscent of the one he waged during his 2017-2021 presidency.
The trade war hit sectors across the board, from manufacturers of vacuum cleaners to machinery, with tariffs imposed on more than US$200bil of goods. The Biden administration has kept most of the tariffs in place.
Several Chinese companies were also hit with export controls by the Trump administration citing national security, such as Huawei Technologies which was barred from purchasing high-end chips, crippling its smartphone business.
Other Chinese tech firms targeted include ByteDance and Tencent, whose respective TikTok and WeChat social media apps came under threat of being banned from operating in the United States.
Some Chinese exporters are already making plans to accelerate relocation or open factories outside China to cope with Trump’s return.
But Chinese tech executives are betting that Trump’s combative approach could work in their favour, as US efforts to slow China’s technological progress might fail to gain international support. — Reuters
