Forecast for US Industrial Policy following Biden’s Election Win and Korea’s Response
|Author||Center for Industrial Policy Research||Date||2020.10.30||Issue No|
Forecasts for US industrial policy are needed with the election of Joe Biden as the 46th US president and a Korean response to a Biden administration.
● Biden is expected to adopt an industrial policy covering business, trade, and technology under the slogans “Build Back Better” and “Made in All of America.”
● With strong checks on China and restructuring of value chains centered on state-of-the-art manufacturing, Biden’s policy will differ in details from that of the outgoing Trump administration.
Mass public spending will restructure the global value chain around the US.
● Mass public purchases by the government to achieve economic goals; new R&D investment; economic recovery through investment in green infrastructure; and attracting businesses to America to foster industry
● Reinforcement of the Buy American Act and the Berry Amendment to reshore state-of-the-art industries and establish value chains within America for crucial sectors such as medicine
● Restoration of the multilateral trade system as an important means of restructuring the global value chain and cooperation with allies to keep China in check
Fostering state-of-the-art industries and focusing on new sectors like semiconductors, energy, and batteries and core technologies
● Restoration of a stable supply network for semiconductors in the US, including manufacturing functions
● Expansion of the clean energy sector and more infrastructure support for domestic battery production
● Stronger anti-trust regulations for digital platform providers amid the cultivation of new and cutting-edge industries
Implications of changes in American industrial policy under Biden administration and related policy tasks
● To respond to the accelerated exodus from China and a US-centric restructuring of the value chain, a comprehensive response to industrial policy encompassing business, trade, and technology is necessary as well as a business strategy that includes preemptive offshoring.
● The Biden administration’s industrial policy stresses aggressive government spending. Accordingly, close monitoring is needed of Washington’s fiscal space and risks entailed by changes to the composition of Congress.
● If American industrial policy changes, a Chinese response and the resulting uncertainty are inevitable. Thus Korea must closely follow and analyze US industrial policy under the Biden administration and the ensuing Chinese response. Seoul’s industrial policy will be based on such developments.？