Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Samsung, Hyundai Motor, Hanwha expand lobbying in US amid Trump risk
By Lee Min-hyung
Korea’s major conglomerates, including Samsung, Hyundai Motor and Hanwha, are spending more to expand their lobbying activities in the U.S., as part of preemptive efforts to minimize potential fallout from the upcoming presidential election there, according to data and industry officials, Thursday.
The movement stands in line with the ever-increasing influence of the world’s largest economy, as Korea expands its export reliance on the U.S. For decades, China has been the biggest trading partner for Korea, but that landscape has been undergoing a rapid change amid the escalating hegemonic battle between the world’s top two largest economies.
According to data from the Bank of Korea, the nation’s exports to the U.S. reached $31 billion (42.5 trillion won) in the first quarter, slightly surpassing the figure to China — which was worth $30.9 billion — for the first time in more than two decades since the second quarter of 2003.
Korean conglomerates are also rushing to place a more strategic focus on the U.S. market by bracing for a potential upheaval from the upcoming U.S. presidential election.
Incumbent U.S. President Joe Biden and former President Donald Trump are poles apart in their policy stances, so local conglomerates have no choice but to set up their own strategies under both scenarios due to the neck-and-neck rivalry between the two candidates, according to company officials.
“The secondary battery and carmaking industries are two sectors more vulnerable to political uncertainty, as Trump outwardly expresses his negative stance towards the Inflation Reduction Act (IRA) pushed by the Biden administration,” an official from a major conglomerate said. Under the IRA, EVs can receive better tax credits when critical materials for their batteries are extracted in the U.S. or other nations which have free trade agreements with the U.S.
U.S. President Joe Biden, left, and former U.S. President Donald Trump / AFP
“From the viewpoint of any non-U.S. firms, there are not any clear preemptive countermeasures for the time being, except for expanding such lobbying activities and building a network with both sides of the two candidates,” the official said.
According to OpenSecrets, a U.S.-based lobbying data tracker, Samusng Group, Hyundai Motor Group and Hanwha Group turned out to have expanded their spending on the relevant lobbying activities in the U.S.
Samsung Group’s key affiliates — such as Samsung Electronics and Samsung SDI — widened their lobbying costs to a record high of $6.3 million last year. Of that amount, Samsung Electronics spent $5.65 million, up more than 4 percent from the previous year.
But of particular note was the steep rise from Samsung SDI — a battery arm of the group. The company allocated a U.S. lobbying budget worth $570,000 in 2023, an increase of over 96 percent from the previous year. The company is teaming up with U.S. carmakers to build joint factories in the territory.
Hyundai Motor Group Executive Chair Chung Euisun, left, shakes hands with U.S. President Joe Biden after addressing the press conference on the carmaker’s decision to build a new electric vehicle and battery manufacturing facility in the U.S. state of Georgia, May 22, 2022. Reuters-Yonhap
Kia — an affiliate of Hyundai Motor Group — also spent a record-high $1.1 million on lobbying in the U.S. last year. The figure is widely forecast to increase further this year amid lingering political uncertainties ahead of the upcoming U.S. election.
“Hyundai Motor and Kia place a huge importance on the U.S. to prove its electric vehicle (EV) presence around the world,” an official from a carmaker said. “Once they attain better sales results and strengthen their brand value in the tech-savvy U.S. territory, they can make smoother inroads into most other regions. Leaving a stronger EV impression at its infancy is crucial, so they are expanding their lobbying expenses there to be swayed less by the political uncertainty.”
Hanwha Group — the seventh-largest conglomerate here — also increased its budget for U.S. lobbying to a new high of $1.58 million last year, up 75 percent from the previous year. Hanwha is going all out to secure IRA subsidies by sharing a mega-sized investment plan to build a production complex for solar panel parts in Georgia. As Trump displays his negative viewpoint on the overall eco-friendly industries, Hanwha Group is heightening vigilance on his potential reelection.
Experts said conglomerates are advised to seek a strategy to gain benefits from the growing protectionism from the U.S.
“Once Trump regains his presidential grip, he will tighten a strategy to exclude China from his economic policy,” said Kim Pil-soo, a professor of automotive technology at Daelim University College. “My view is that carmakers and battery firms can also gain incentives by developing their strategies.”
Political circles are also moving to back up industry players by opening an exchange center in Washington, D.C., for businesspeople in Korea and the U.S.
The Korea Inter-Parliamentary Exchange Center (KIPEC) opened last month, with a view to bolstering bilateral political and economic cooperation between the two countries amid Korean firms’ growing investments in the U.S.
Korea’s investments in the U.S. have been on the steep rise. According to data from the Export-Import Bank of Korea, the figure reached about $11.2 billion in 2018, but has since soared to $27.7 billion in 2023.