Potential Tariff Targets Under a Hypothetical Trump Administration


1. Expected Tariff Target Items

1) Automobiles

Background

Former President Trump emphasized the "revival of the U.S. automotive industry," previously considering tariffs on auto exports from the EU, Japan, and South Korea. Companies exporting complete vehicles without U.S. production facilities have been consistently mentioned as potential tariff targets.

Impact

  • Automotive industries in South Korea, Japan, and Germany, which rely heavily on exports, may face significant setbacks.
  • Countries like Mexico, which serve as U.S. production bases, could avoid direct tariffs, but additional tariffs on parts may increase final assembly costs.

2) Semiconductors

Background

Semiconductors are at the heart of the U.S.-China tech rivalry, with the U.S. aiming to maintain domestic companies' competitiveness and localize critical component production.

Impact

  • South Korean (Samsung, SK Hynix) and Taiwanese (TSMC) semiconductor exports to the U.S. may face tariffs, potentially raising prices for IT and electronics in the U.S.
  • Emerging markets such as Malaysia and Vietnam, which play roles in semiconductor assembly and testing, may experience indirect effects on exports.

3) Pharmaceuticals & Medical Devices

Background

The U.S. is a major consumer in the global pharmaceutical market but imports a substantial portion of active pharmaceutical ingredients (APIs) and medical supplies. To boost domestic pharmaceutical production, tariffs on foreign products have been speculated.

Impact

  • Major pharmaceutical raw material producers such as India and China could be directly affected.
  • Increased subsidies and tax incentives for domestic production may lead to a restructuring of global pharmaceutical supply chains.

4) Electronics

Background

Smartphones, home appliances, and displays are predominantly produced in China and Southeast Asia before being exported to the U.S. Many electronic products were previously targeted in the U.S.-China trade war, and the scope may expand further.

Impact

  • Vietnam, Thailand, and Indonesia, which export a significant volume of electronics to the U.S., may face trade disruptions.
  • However, the acceleration of the "China Plus One" strategy, where companies shift production from China to Southeast Asia, could offer new investment opportunities.

5) Batteries & Electric Vehicle Components

Background

The electric vehicle (EV) and battery sectors are key future industries, with the U.S. actively fostering domestic EV and battery production (Tesla, GM, Ford). South Korea (Samsung SDI, LG Energy Solution, SK On) and China (CATL) lead the global battery supply chain, while Japan (Panasonic) also holds a competitive position.

Impact

  • If additional tariffs are imposed, South Korean and Chinese battery companies may accelerate U.S. plant investments or establish joint ventures.
  • South American countries (Chile, Argentina, Bolivia), which produce lithium and other raw materials for batteries, may face uncertainties if the U.S. restricts sourcing to allied nations.

2. Impact on Emerging Markets

1) Declining Export Competitiveness & Trade Diversification

  • High U.S. tariffs could significantly reduce the price competitiveness of emerging market exporters.
  • If tariffs extend to high-value industries such as steel, automobiles, semiconductors, and electronics, businesses in Southeast Asia and South America may need to diversify their export markets, targeting regions such as the EU, the Middle East, and Africa.

2) Manufacturing Investment Opportunities Amid Supply Chain Restructuring

  • Some companies may shift production bases to third-party countries (such as the U.S. or tariff-exempt nations) to bypass U.S. tariffs.
  • Emerging markets with low manufacturing costs and extensive free trade agreements (Vietnam, Malaysia, Mexico) may attract new investments.
  • Conversely, countries without FTAs with the U.S. or those facing political instability could be marginalized in global supply chains.

3) Financial & Investment Volatility

  • Escalating trade tensions may lead to currency instability in emerging markets, increasing fluctuations in foreign investment flows.
  • Countries heavily reliant on manufacturing exports may experience economic slowdowns, dampening investor sentiment.

4) Reshoring & Nearshoring Impacts

  • If the U.S. intensifies its reshoring (bringing manufacturing back to the U.S.) and nearshoring (shifting production to nearby countries like Canada and Mexico) policies, emerging market manufacturers may need to seek alternative markets.
  • Mexico, with its geographical and FTA advantages, may emerge as a new production hub, creating disparities among emerging economies.

Conclusion & Outlook

  • Potential additional tariff targets under a hypothetical Trump administration include automobiles, semiconductors, pharmaceuticals, electronics, and EV-related components, aligning with policies to protect U.S. manufacturing and technology sectors.
  • The impact on emerging markets is twofold: a decline in export competitiveness and price increases versus potential opportunities from global supply chain restructuring.
  • Governments and businesses must adopt strategies such as trade partner diversification, local production investments, and FTA expansion to mitigate tariff risks.
  • Ultimately, tariff policies under a Trump administration would be highly fluid, influenced by political and diplomatic variables, making actual implementation timing and scope uncertain.

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