- KITA considered changes in policies and market conditions under the new US administration, such as reinforcement of eco-friendly, public health, and technology innovation –
It was argued that Korean companies should actively expand into the US market as the launch of the new administration of Biden will likely to boost the exports of new industries such as new and renewable energy, electric vehicles, biohealth, digital transformation, and home living.
The Institute for International Trade (President: Choi Yong-min) of the Korea International Trade Association issued a report titled “The Launch of the New Administration of the United States and the 5 Promising Areas for Exporting to the United States” on January 25th, and the organization presented five promising export areas taking into account the policy direction of the United States and recent changes in consumer market trends following the inauguration of the new administration of Biden.
New and renewable energy related items are closely related to the changes in the policy of the Biden administration. President Biden has emphasized active investment in new and renewable energy infrastructure to achieve carbon neutrality by 2050. Accordingly, the related items such as solar cells/modules and wind power towers are expected to benefit. Last year, the United States imported $8.16 billion of solar cells and 11.5 percent ($940 million) of which was from Korea.
Btteries, a key component of electric vehicles and, were also evaluated as areas with high growth potential thanks to policy supports such as expansion of charging stations in the United States and subsidies. In particular, the US imports of Korean-made batteries last year increased by 20.5 percent to 770 million dollars year-on-year, and it is expected to maintain solid growth in the future. Since Korean companies are expanding their investment in the battery sector in the United States, the increase in exports of core materials and equipment used in local production is also expected to work favorably.
The biohealth market is expected to expand exports on the back of the new administration's policy stance to strengthen public health care as well as the aging of the population in the United States. The number of elderly people aged 65 and older in the United States in 2020 is about 55.05 million, the largest among developed countries. Therefore, the report anticipated that exports of related products, such as medicines, including generics and biosimilars, and physical therapy devices will boost, along with the increased exports of test kits, masks, and other quarantine supplies due to COVID-19 last year .
Demand for the digital transformation accelerated by COVID-19 will increase. In fact, the United States' imports of high-speed storage devices (SSDs) and cameras last year increased by 38.4 percent and 10.2 percent, respectively, compared to the previous year. In addition, the report forecast that exports of communication equipment and parts will be promising as US mobile telecommunication companies are announcing investment in 5G mobile communication in earnest this year.
Moreover, exports of home and living products are also expected to expand thanks to the rise of millennials born in the 1980s and 2000s. Millennials, who have grown up with the development of the Internet, prefer to consume things at their homes because they are familiar with the non-face-to-face trend utilizing digital technology. Therefore, Various processed foods including noodles, the United States' import of which increased by 36.2 percent last year, and home appliances are expected to be in the spotlight.
Jung Hye-sun, a senior reporter at the Korea International Trade Association, said, “It is required to target the US market with product development and marketing strategies related to five promising areas in line with the new policy changes of the United States' new administration.”