Trump Delivers Joint Address to Congress, Pushing Tariffs and Fiscal Cuts

- Trump's Speech on US Economic and Trade Policy - South Korea's Issue of Participation in the Alaska Project for Natural Gas Construction [Unblock Media] President Trump recently addressed Congress, outlining key positions on US economic and trade policies. The speech covered a broad range of economic issues, including expanding domestic oil drilling, pursuing fiscal balance, passing tax cut legislation, repealing the Semiconductor Support Act, and strengthening tariff policies. President Trump announced plans to increase domestic oil drilling permissions. This is expected to lead to increased US energy production, potentially causing an oversupply in the international crude market and putting downward pressure on oil prices. Particularly, if the US reduces its reliance on Middle Eastern oil imports, it could weaken the market dominance of the Organization of the Petroleum Exporting Countries (OPEC) and alter the global oil supply chain. However, it may also conflict with policies promoting a shift to eco-friendly energy, sparking controversy. President Trump expressed aims to reduce fiscal spending to decrease debt and achieve fiscal balance. This move could long-term enhance financial market stability and curb interest rate rises. However, industries reliant on government spending (e.g., infrastructure, defense, research and development) might experience growth slowdowns in the short term. In addition, he called for the passage of a comprehensive and permanent tax cut bill. Tax cuts could stimulate economic growth by increasing consumer and corporate investment. However, simultaneously reducing fiscal spending and implementing tax cuts could expand fiscal deficits, necessitating a balanced policy approach. Strengthening protectionism, President Trump declared tariffs on products not produced in the US. Specifically, an additional 25% tariff on certain industries such as steel, aluminum, and copper is scheduled, with President Trump highlighting that South Korea imposes tariffs on average four times higher than the US. This could exacerbate trade conflicts globally, including US-South Korea trade relations, particularly in light of South Korea and Japan's interest in participating in the Alaska gas pipeline project, which might affect negotiation leverage. President Trump evaluated the Semiconductor Support Act as a 'poor support program' and announced the cessation of semiconductor company support through it. This implies that US semiconductor companies will need to independently pursue research and development and production without government support. Consequently, the US could face disadvantages in technological competition with China, negatively impacting the global semiconductor supply chain. Conversely, there is an argument that market-driven competition without government aid could be more efficient. To support the US automotive industry, President Trump announced tax deductions for loan interest when purchasing American cars and plans for the top three American automakers to build new plants. This policy is seen as a move to boost domestic manufacturing and job creation. Additionally, he proposed incentives for commercial and military shipbuilding companies to revive the shipbuilding industry, intending to establish new relevant organizations. While this could enhance competitiveness in the shipbuilding industry, it may intensify competition with South Korea and China in the international shipbuilding market. Emphasizing measures to strengthen national security, President Trump claimed that countries receiving US military support impose unfair economic burdens on the US. He also stated the need to secure Greenland at all costs, considered in light of Arctic resources and military strategic value. Furthermore, he mentioned that Russia-Ukraine peace talks are ongoing, suggesting that Ukraine is ready to sign a mineral agreement. This indicates that the US might actively seek mineral resource acquisition during post-war reconstruction, potentially impacting the global raw materials market. Lastly, Trump mentioned efforts to reclaim the Panama Canal, which could have significant implications for global logistics and the shipping industry. President Trump’s speech reflects a strong intent to protect the US economy and revive its manufacturing sector. However, the increased protectionism and reduction of government support policies could raise market volatility in the short term and carry risks of weakening the US’s position in international trade conflicts and technological competition.