Ahead of the inauguration of the second Trump administration next month, domestic corporations are seeking new investments in the United States. However, there are significant concerns among corporations since many did not achieve the expected results after making large-scale investments in the U.S. during Trump's first term. Recently, fluctuations in exchange rates and labor costs have also led to a sharp increase in investment costs.
According to the business community on the 24th, domestic corporations have activated U.S. experts and lobbying personnel since last month, when former President Donald Trump won the election, to build a friendly relationship with the upcoming U.S. administration. Trump, a former businessman, has often praised foreign corporations when they invest in the U.S. and create jobs.
Domestic corporations also made large-scale investments in the U.S. during Trump's first administration. Lotte Chemical announced in 2019 that it would invest $3.1 billion (approximately 3.6 trillion won) to construct an ethylene plant in Louisiana. At that time, President Trump praised Shin Dong-bin, chairman of Lotte Group, and he became the first among domestic business leaders to have a one-on-one meeting at the White House.
Samsung Electronics announced plans to build an appliance factory and semiconductor production lines, while SK stated it would invest in U.S. shale gas development. Hyundai Motor disclosed a plan to invest in the U.S. to develop eco-friendly and autonomous vehicles.
However, some of the investments made by domestic corporations during Trump's first administration did not meet expectations. Lotte Chemical, which was touted as a model case for investments in the U.S. by former President Trump, has struggled in recent years due to oversupply following the expansion of large-scale petrochemical plants in China. Ethylene produced at Lotte Chemical's Louisiana plant is cited as a typical oversupplied item.
SK invested over $600 million (approximately 870 billion won) in a U.S. shale gas development company over two years starting in 2017, but incurred significant losses due to market downturns and falling oil prices caused by the coronavirus pandemic. SK Innovation sold its stake and facilities in U.S. shale gas fields, which had been struggling with losses for several years, in 2021.
Having already made large-scale investments under the Biden administration, coupled with a prolonged economic downturn, domestic corporations find themselves with limited capacity for new investments. The Hyundai Motor Group completed the 'Metaplants' in Georgia in October, capable of producing 300,000 eco-friendly vehicles annually, investing over 10 trillion won. Since Trump indicated a reduction in benefits for electric vehicles, it has become uncertain whether the Metaplants will achieve the expected results.
Domestic battery companies, including LG Energy Solution, SK On, and Samsung SDI, which are building factories in the U.S., are facing a greater likelihood of continued poor performance, making it difficult for them to invest further in the U.S.
A business representative noted, "Many corporations have learned the lesson that reckless investments in the U.S. during Trump's first term and the Biden administration could lead to setbacks. In the future, they will consider new investments in ways that will be less impacted by changes in the political landscape in the U.S."