“Batteries and power devices benefit from the ‘blue wave’… steel and automobiles are adversely affected.”

Hyundai Economic Research Institute report… “Adjustment by item and change in industry support policy”

“The government must expand cooperation with the U.S. Congress… Companies must reorganize their production and supply chains.”

(Seoul = Yonhap News) Reporter Lee Do-heun = With the Democratic Party taking control of both the Senate and House of Representatives in the U.S. midterm elections, the domestic battery and power device industries are expected to benefit, while the automobile and steel industries are expected to face increased tariff and regulatory burdens, according to an analysis.

In its report titled ‘Domestic Industrial Weather Map to Be Driven by the Blue Wave’ published on the 10th, the Hyundai Research Institute said, “As Congressional checks focus on adjusting industrial policy through budget, supervision, and legislation, positive and negative impacts are expected to be differentiated for each major domestic industry.”

The Democratic Party secured 54 seats in the Senate and 254 seats in the House of Representatives in this midterm election. Accordingly, it is expected that checks on the executive branch of the Democratic Party-led Congress will be further strengthened in the future.

By industry, batteries and power devices were selected as the main beneficiaries.

This is because the North American business opportunities for domestic battery companies may increase as the Democratic Party pushes to expand the power grid and expand support for energy storage systems (ESS) and clean energy.

In particular, the profit stability of local production is expected to improve as the possibility of further reduction of the Advanced Manufacturing Production Tax Credit (AMPC), which is the key to the profits of domestic battery companies, decreases.

The power equipment industry is expected to benefit from increased power demand in data centers and manufacturing industries and increased investment in transmission networks. The explanation is that as the delivery period for large transformers in the United States is 2 to 4 years, and the supply shortage is prolonged, opportunities for domestic companies to receive orders for transformers and distribution equipment may expand.

On the other hand, bad news is expected for the automobile and steel industries.

While the 15% tariff on automobiles remains in place, supervision of labor and environmental regulations and origin standards under the North American Trade Agreement (USMCA) is likely to be strengthened. The tariff burden on domestic automakers is estimated to be around 700 billion to 900 billion won per quarter.

In the case of steel and aluminum, the policy of protecting domestic industries is expected to be strengthened as the interests of the steel union, which is the support base of the Democratic Party, are reflected.

Accordingly, if the 50% tariff is maintained and import regulations based on US procurement requirements and carbon emissions are strengthened, the price competitiveness and profitability of Korean steel will deteriorate.

In the case of the semiconductor industry, the Democratic Party's strengthened supervision of subsidy execution may be a positive factor in lowering local investment uncertainty in the United States, but there are concerns that AI infrastructure investment will be delayed if data center power costs and licensing regulations are strengthened.

In the shipbuilding industry, opportunities for maintenance and repair (MRO) and merchant shipping cooperation are expected to remain in line with the U.S. shipbuilding industry reconstruction policy. However, if the bill restricting overseas construction of U.S. Navy combat ships is finally reflected, the scope of direct participation of the Korean shipbuilding industry may be reduced.

The researcher suggested that differentiated responses from the government and companies are needed.

He ordered the government to expand cooperation channels not only with the U.S. administration but also with Congress, and to proactively respond to non-tariff barriers and regulatory risks.

It was suggested that companies need to reorganize their production and supply chains on the premise of prolonging the tariff burden. It is pointed out that the battery, shipbuilding, and power equipment industries should proactively expand their production capacity and cooperation base in the United States, while the automobile, steel, and semiconductor industries should strengthen cost competitiveness and export market diversification.

In addition, regarding the $350 billion investment in the United States, the researcher suggested, "As concerns are raised about the hollowing out of the domestic industry and capital outflow, the profitability of each business and the domestic ripple effect must be closely examined."