1. Conclusion of the Ukraine and Israel Gaza Strip Wars
Trump’s primary policy is pragmatism. He is likely to seek an early end to two significant wars incurring substantial costs to the US. As of November 2023, the US had spent approximately $60 billion (approximately $785.52 billion won) on the Ukraine-Russia war alone. Pursuing pragmatism, Trump is expected to induce compromises between Russia and Ukraine, as well as between Israel and Palestine. Consequently, the conclusion of these wars is anticipated to stabilize prices of natural gas and oil, and various support programs for Ukraine’s reconstruction are expected to unfold. Additionally, Trump is reported to have a close relationship with Russian President Vladimir Putin.
2. Withdrawal from the UN Framework Convention on Climate Change (UNFCCC) and Reduction or Abolishment of Renewable Energy-related Projects
Trump advocates for the use of traditional fossil fuels such as oil and shale gas. Therefore, there is a high likelihood of withdrawing from the agreement on climate change support for developing countries reached at the November 2022 climate summit. Expansion of infrastructure for fossil fuels like oil and natural gas is expected, while support for renewable energy projects (such as electric cars and batteries) is likely to be reduced or abolished. Moreover, there is a high possibility of simplifying regulations and licensing for the nuclear industry to expand nuclear energy for military purposes. Companies in the electric vehicle sector and other renewable energy-related businesses that have established factories in the US with subsidies from the Biden administration are expected to face significant risks.
3. Fiscal Tightening and Tax-cut Oriented Policies
If Trump is re-elected, there is a high probability of abolishing the Inflation Reduction Act (IRA). The IRA has been highly controversial, even facing direct protests from Europe, Japan, and even Korea upon its implementation. Notably, it includes clauses aimed at unfair trade practices, such as tax deductions and subsidies for North American products related to <Energy Security and Climate Change Response>, excluding minerals and secondary batteries from China. Trump, focusing on fossil fuels, is expected to repeal or drastically amend this legislation. This could pose significant risks to renewable energy companies and the automotive industry, especially electric vehicle manufacturers.
4. Relaxation of Financial Regulations
If re-elected, Trump is expected to modify parts of the Dodd-Frank Act enacted in 2010 to relax overall financial regulations. During his presidency in 2018, Trump implemented relaxation measures for the Dodd-Frank Act. One of the measures was changing the threshold for enhanced supervision of bank assets from over $500 billion to over $2,500 billion, resulting in the bankruptcy of SVB (Silicon Valley Bank) as claimed. Regardless, there is a need to pay attention to the repercussions of relaxed financial regulations on financial institutions.
5. Expectation of Significant Reduction in the Role of the Federal Reserve System (US Central Bank)
It is expected that the Federal Reserve’s role, except for price stability, will be substantially revised. It is anticipated that Trump’s administration will significantly reduce the discretion of the Federal Reserve in matters related to full employment and other economic issues. It is worth noting that in October 2018, Trump remarked “The Fed is crazy” after facing a situation where stock prices plummeted and economic indicators declined due to the Federal Reserve’s interest rate hike policy.
6. Relationship with China
If Trump is re-elected, it is expected that the extent of US involvement in the event of a Chinese invasion of Taiwan will be somewhat relaxed compared to the Biden administration. Trump will certainly not turn a blind eye to China’s invasion of Taiwan, but is expected to respond somewhat more leniently than Biden. Although the containment policy against China will continue, the Trump administration is expected to be more proactive in negotiations with China. However, significant increases in tariffs on Chinese imports are anticipated. It is also expected that most favored nation treatment for China under the WTO will be revoked. Sanctions against China are expected to continue in various aspects, including prohibition of Chinese investment in advanced technology businesses and cancellation of visas for Chinese nationals, as well as the delisting of a significant number of Chinese companies currently listed on the NASDAQ.
7. Trade-related Measures
It is expected that Trump will impose a uniform 10% tariff on all imported goods. As of 2022, the average tariff rate in the US is 3.3%. The reason for this is that the federal government has covered over 80% of federal government imports through tariffs since the 19th century until World War II. Trump has stated that he will use the profits from tariff increases for the benefit of US citizens. Imposing a 10% tariff on imported goods, the world’s largest market, without discrimination, will be a significant setback for countless exporting companies worldwide.
The above content was excerpted from the 20 mandate & leadership 25, agenda 47 preliminary pledge book and newspaper articles.