U.S. President-elect Donald Trump speaks to members of the media during a press conference at Mar-a-Lago in Palm Beach, Fla., Jan. 7. AFP-Yonhap

Major export-driven industries here are in peril of losing growth momentum under the incoming presidency of U.S. President-elect Donald Trump whose repeated threats for more tariffs and subsidy cuts drive more Korean firms into a corner.

The looming fear has yet to be crystalized, but export-reliant tech firms in areas such as automobiles, batteries and shipbuilding leave open diverse scenarios to minimize potential shocks from Trump's outward advocacy for protectionism.

Automobiles

Automobiles are one of Korea's key industries highly vulnerable to potential policy changes during the Trump era. His hatred for electric vehicle (EV) subsidies will particularly come as major downside risks to Hyundai Motor, Kia and Genesis.

If Trump actually repeals the Inflation Reduction Act (IRA), both EV makers and battery suppliers will end up losing big. The IRA is a flagship policy drive of the incumbent Joe Biden administration, the gist of which is to offer tax credits for EVs with batteries containing materials extracted within the United States.

However, Hyundai Motor Group displayed confidence of tackling the uncertainty with agile adjustments in its strategies there. In a recent New Year event of the group, Hyundai Motor President Sung Kim said the carmaker is "ready to respond to market changes," as the company has long-term strategies and a number of action plans under any scenarios.

Expectations are that the Korean carmaker will increase its sales portion for hybrids there to tackle such possible geopolitical uncertainties. The ongoing period of the global EV chasm before their mass adoption also pushes the three car brands to reshape their strategy by increasing sales of hybrids to ensure profitable growth and maintain their market share in the world's largest economy.

"Korean carmakers and other manufacturing firms will have to expand their lobbying activities with U.S. authorities, so they can reduce any regulatory risks during the upcoming era of Trump," an official from the car industry said.

Hyundai Motor's IONIQ 9 electric SUV is displayed during the Los Angeles Auto Show at the LA Convention Center in Los Angeles, Calif., Nov. 21. EPA-Yonhap

Batteries

Major battery firms here — such as LG Energy Solution, Samsung SDI and SK On — are also heightening their vigilance on the policy direction of the Trump administration.

Aside from the subsidy cut, Trump is considering imposing additional tariffs on EV batteries with materials sourced from China. Most battery firms still rely on China for key raw materials used in batteries, such as graphite and cobalt.

"Battery firms have to leave open the worst-case scenario and take steps to diversify their supply chains for batteries," an industry official said.

Nothing specific has yet been confirmed on the agenda, but given Trump's repeatedly negative rhetoric on EV batteries, the aforementioned battery firms will end up raising their battery prices to cover the costs for increased tariffs. This does no good to boosting their price competitiveness at a critical time when battery firms are struggling with steep earnings falls in the aftermath of global EV industry slowdown.

Responding to the gloomy outlook, the three Korean battery giants have entered emergency mode and are on track to realign their business portfolios by increasing their non-EV battery businesses, such as energy storage systems.

The rapid rise of Chinese battery firms also poses a serious threat to their Korean counterparts. According to data from market tracker SNE Research, the three Korean battery firms' combined share in the global EV battery market reached 19.8 percent for the first 11 months combined of 2024, down 3.5 percentage points from a year earlier.

The figure hit a high of 34.8 percent in 2020, but has been on course for a gradual decline due to the emergence of Chinese rivals.

A model of the second of three Changbogo-III Batch-II class submarines / Courtesy of Hanwha Ocean

Shipbuilding

But some industries — represented by shipbuilding — may benefit from the incoming Trump administration, as he has asked for more partnerships with Korean players.

This raises hopes for local shipbuilders, such as Hanwha Ocean and HD Hyundai Heavy Industries, to win more order from the U.S.

In a recent remark made to a U.S. talk show, Trump hinted at the possibility of signing a shipbuilding partnership with Korea by saying that the U.S. will "use allies in terms of building ships."

Last year, Hanwha Ocean won orders for maintenance, repair and overhaul (MRO) services for the U.S. Navy.

HD Hyundai Heavy Industries is also another key beneficiary during the presidency of Trump. Top U.S. naval officials visited the worksites of the shipbuilding arms of Hanwha and HD Hyundai last year for a possible alliance in building and maintaining warships.

Aviation

The strengthening dollar is a key variable that will affect Korea's aviation players during the Trump presidency. His unpredictable nature will accelerate investors' preference for the U.S. dollar and a series of other safe assets.

As airlines have to pay their fuel costs in dollars, this means local full-service carriers and low-cost carriers, such as Korean Air, will face a higher likelihood to shoulder more financial burden in an era of Trump.

The won-dollar exchange rate hovers around 1,450 won per dollar, the highest level in 15 years. A general view is that the high level of the exchange rate will persist at least for the first half of 2025 due to Korea's political upheaval triggered by the impeachment of President Yoon Suk Yeol and external uncertainties from Trump.

"The high exchange rate will keep weighing on aviation players for the next few months," an official from an airline here said. "As it is very hard to predict the ups and downs of the exchange rate, we have no choice but to heighten our vigilance on the macroeconomic uncertainty."