As the potential for strengthening the protectionism in the USA increases, Gwangyang Industrial Complex, the middle of the Korea Steel and Secondary Battery Industry, is facing a serious crisis.
If former President Trump re -aggregates, the corporate’s exports of corporations in Gwangyang Industrial Complex have increased significantly, as additional tariffs on steel and secondary batteries are expected.
In response, Gwangyang City held the ‘Trump 2nd Goal Policy Response Meeting’ on the twenty fourth to attenuate the damage of local steel and secondary batteries and prepare a response strategy.
On the meeting, representatives from the steel and secondary batteries industry and related organizations gathered to take heed to corporate difficulties and discuss realistic countermeasures. Nevertheless, concerns have been raised about whether the direction of the response of Gwangyang might be effective.
Response measures to guard Gwangyang City, Steel and Secondary Battery Industry
On this meeting, Gwangyang City announced that it’s going to suggest the federal government to designate a special area for industrial crisis, designate secondary battery advanced strategic industrial complexes, and specify the steel industry as a national high -tech strategic industry.
Currently, Gwangyang City’s key countermeasures are as follows.
â–¸ Promote designation of special areas of the Gwangyang Industrial Crisis -If the federal government is designated as a special area, various support equivalent to financial support, tax advantages, and deregulation will likely be possible. Nevertheless, the case that has been designated as a special area has been applied only when the industry is in a severe crisis, and it’s uncertain whether the Gwangyang Industrial Complex will meet those standards.
â–¸ Further designation of secondary battery strategic industrial complexes -Because the secondary battery industry emerged as a core industry in the long run, it is feasible to construct infrastructure and support infrastructure when the federal government is designated as a special complex. Nevertheless, for the reason that secondary battery industry is inbuilt the metropolitan area and Chungcheong region, it remains to be unclear that Gwangyang City will likely be further designated.
â–¸ Request for specification of the steel industry as a national high -tech strategic industry -If the steel industry is designated as a national high -tech strategic industry, it is feasible to receive R & D support and policy protection on the national level. Nevertheless, it could be controversial whether the steel industry might be classified as a high -tech industry equivalent to semiconductor and batteries.
â–¸ Request for reduction of electricity bills and tax advantages -As a way to reduce the burden of production costs for steel and secondary batteries corporations, policy support was made. Nevertheless, it’s identified that the federal government is unlikely to implement an electricity bill reduction policy for less than a selected industry, and that the realistic implementation is less likely.
â–¸ Request for presidency support to address the reduction of exports of the US -A subsidy paid for financial support and tariff increase to compensate for the reduction of exports to corporations. Nevertheless, there are also opinions that a more real -time response strategy is required, equivalent to the FTA renegotiation and the expansion of production base in the USA reasonably than simply subsidies.
The realistic crisis of the steel and secondary battery industry and the constraints of response to Gwangyang
The largest crisis of Gwangyang Industrial Complex is the strengthening of the US tariff barriers and the rise within the inflow of low -priced Chinese products. If the USA imposes additional tariffs on steel and secondary batteries, the most important corporations of Gwangyang Industrial Complex will lose their competitiveness in exports to the USA, and market share is more likely to fall.
Specifically, the steel industry is similtaneously the US protection trade and the low -priced Chinese products into the Korean market are risk of double highschool.
In consequence, it’s identified that the federal government -level response is urgent to implement anti -dumping measures against Chinese steel products and to forestall domestic steel corporations from damage.
The secondary battery industry can also be more likely to be disadvantaged by battery products containing Chinese raw materials attributable to the US IRA (inflation reduction).
In consequence, Korean batteries and battery materials are more likely to be difficult to take care of price competitiveness within the US market.
Gwangyang City is preparing a wide range of countermeasures to beat this example, but there’s an absence of considerable alternatives.
Gwangyang City needs a more realistic response strategy
Gwangyang City is actively responding to the US protection trade barriers and changes in the worldwide industry, nevertheless it is identified that it just isn’t only a request for presidency support, but reasonably a more practical and specific strategy.
Initially, a more lively response is required in preparation for a decrease in exports to the US. A negotiation strategy needs to be carried out to guard the steel and secondary battery industry through the US -based production base or the renegotiation of the FTA.
As well as, it’s urgent to reply to Chinese low -cost steel products. As a way to prevent domestic steel corporations from being damaged, anti -dumping measures and trade relief measures needs to be carried out quickly, and Gwangyang City should actively suggest it to the central government.
Within the case of the secondary battery industry, it’s most vital to secure an overseas raw material supply chain. The federal government and firms must cooperate jointly in order that Korean corporations in Korea can sign a protracted -term supply contract with raw materials equivalent to Argentina and Indonesia.
Gwangyang City is actively preparing for the protection of the steel and secondary battery industry, but the present strategy is just a request for presidency support and there’s a limit to lack of practical implementation.
Gwangyang City needs to arrange more realistic countermeasures to be able to alleviate the shocks brought on by the Trump 2nd tariff policy and protect the local economy.
Gwangyang City should cooperate with central governments and firms to arrange practical solutions and promote implementable strategies, not only requests. It’s identified that this crisis is a possibility, and the Gwangyang Industrial Complex needs a fundamental response to leap right into a more competitive industry.
By Yang Joon -seok, reporter kailas21@aitimes.com
