[Deep Dive] 3 Key Impacts of 'America First' Pledges in US Election on South Korea's Export Industries

'America First' Solidifies as a Structural Paradigm

As leading candidates in the 2026 US presidential election unanimously promote aggressive "America First" economic pledges, the global trade order is experiencing significant turbulence. Beyond simple tariff adjustments, these policies reveal a strategic intent to completely restructure global supply chains around the United States. According to major national research institutes like the Korea Institute for International Economic Policy (KIEP), US trade policy has entered a phase of structural transition where protectionism serves as the fundamental baseline, regardless of the administration.

This shift inevitably poses a direct threat to the South Korean economy, which relies heavily on exports as a percentage of its GDP. Given South Korea's substantial trade surplus with the US, it is highly likely to become a primary target for universal tariffs or pressures to resolve trade imbalances.

3 Core Factors Threatening South Korea's Export Industries

1. Universal Tariffs and the Erosion of Price Competitiveness

The pledge to impose a universal baseline tariff of around 10% on all imported goods is detrimental to the price competitiveness of domestic companies. KIEP analysis indicates that if such measures materialize, South Korea's total exports could decrease by billions of dollars. Key export items to the US, particularly automobiles, machinery, and steel, are projected to take the most direct hit.

2. Contraction in Industrial Intermediates and Heterogeneous Trade Diversion

The ripple effects of the US imposing steep tariffs on China and accelerating decoupling cannot be ignored. While some anticipate a "trade diversion effect" where South Korea fills the void left by China, the reality is far more complex. In the industrial intermediate goods and components sectors, where South Korean and Chinese exports often decline together, a negative spillover effect is distinctly observed, simultaneously hurting South Korea's exports to both the US and China.

3. Subsidy Rollbacks and Investment Uncertainty in Advanced Tech

There is an ever-present risk that key supportive legislation from the previous administration, such as the CHIPS Act and the Inflation Reduction Act (IRA), could be significantly revised or see their subsidies reduced. Domestic semiconductor and EV battery companies that have executed massive investments in manufacturing facilities on US soil face the double burden of deteriorating profitability and delayed ROI due to policy volatility.

Strategic Diversification to Counter Global Supply Chain Restructuring

In an environment where US protectionism is becoming entrenched, export strategies relying solely on agreements like the KORUS FTA have reached their limits. Export market diversification is no longer an option, but a prerequisite for survival.

• Solidarity with Like-Minded Nations: South Korea must strengthen trade coordination with countries like Japan and the EU, which are equally likely to suffer from intensified protectionism.
• Pioneering New Markets and Transitioning to High Value-Added Goods: It is crucial to reduce trade dependency on specific nations and actively target emerging markets, while fundamentally transforming into high value-added industries backed by unassailable technological gaps rather than commodity products.
• Advancing the Early Warning System (EWS) for Supply Chains: To preemptively respond to stricter rules of origin and non-tariff barriers, transparent origin management at the corporate level and a systematic monitoring platform led by the government are required.

Heading into the second half of 2026, the trajectory of the US election will serve as a watershed moment that reshapes the medium-to-long-term landscape of South Korea's export industries, far beyond short-term financial market volatility. Preemptive risk diversification and securing exclusive technological competitiveness are the only definitive solutions to navigate this uncertainty.