Arya News - Experts see bipartisan support for $350b investment plan, but warn of closer scrutiny of shipbuilding, energy and chip projects.
SEOUL – Democratic gains in Tuesday’s US midterm elections could bring tougher congressional scrutiny of US President Donald Trump’s trade and industrial policies, adding uncertainty for South Korean companies investing billions of dollars in American manufacturing.
According to US media outlets, Democrats had secured control of the Senate and were closing in on a House majority as of press time in Seoul on Wednesday, with several races still undecided as vote counting continued. The emerging results pointed to stronger congressional checks on the Trump administration, potentially complicating tariffs, subsidies and major investment projects.
For South Korea, the biggest concern is not necessarily a reversal of its trade and investment commitments to Washington, but possible delays and changes in how projects are implemented.
Experts say the two countries’ investment agreement is likely to remain intact, given bipartisan support for rebuilding US manufacturing and reducing reliance on China. But projects requiring congressional funding, new legislation or environmental approvals could face greater scrutiny.
“The Trump administration has governed through executive orders,” said Shin Won-kyu, head of the Global Economic Research team at the Korea Economic Research Institute. “The Republican majority Congress simply followed.”
A stronger Democratic presence could challenge that approach, although Trump’s executive powers and presidential veto would limit Congress’ ability to reverse existing policies.
“Democrats are not against reviving US manufacturing,” Shin said. “But Congress will check the methods, such as whether a project harms the environment or raises energy costs.”
Korea’s US investment commitments
South Korea’s $350 billion investment pledge to the US includes $200 billion for strategic industries and $150 billion for shipbuilding cooperation.
The shipbuilding package covers corporate investment, guarantees and ship financing, rather than direct government spending alone.
Experts expect the overall framework to survive changes in congressional control.
“The US does not overturn existing policy when power changes hands, as long as it does not harm national interests,” said Hwang Yong-sik, a business professor at Sejong University. “The current structure for US investment is likely to be maintained.”
Kim Sang-bong, an economics professor at Hansung University, said the $200 billion government-led investment component is “likely to be executed on the existing schedule.”
Still, individual projects could face different political pressures.
One is the Alaska LNG project, which would transport natural gas from northern Alaska to an export terminal on the state’s southern coast.
Trump has urged South Korea to participate, but Seoul has maintained that any investment must be commercially viable.
Stronger Democratic opposition to fossil fuel development on environmental grounds could complicate the project, potentially giving Seoul more time to assess its economic feasibility.
Shipbuilding presents another challenge.
Under the Make American Shipbuilding Great Again, or MASGA, initiative, South Korea and the US are seeking to expand cooperation in shipyard investment, vessel construction and maritime technology.
But the House’s 2027 defense bill, passed in July, includes a provision restricting the use of defense funds for foreign-built warships. The measure, led by Democratic Rep. Jared Golden, could complicate plans to allow companies investing in US shipyards to build the first two vessels of each type overseas.
“A Democratic win could make it harder to build US warships in Korean shipyards,” said Koo Ki-bo, a professor at Soongsil University.
Even so, broader shipbuilding cooperation is expected to continue, as both parties view rebuilding US maritime capabilities and countering China’s dominance as strategic priorities.
Tariffs may be another source of friction. Many of Trump’s trade measures rely on Sections 232 and 301 of US trade law, which give the executive branch broad authority to impose tariffs on national security and unfair trade grounds.
Democrats could intensify scrutiny of how those powers are used, particularly their impact on consumer prices and US businesses, but reversing the measures would be difficult without sufficient votes to overcome a presidential veto.
Shin said pressure to exempt smaller US businesses from certain tariffs could also benefit Korean exporters.
Korean manufacturers face uneven impact
The election’s implications extend to major Korean investments already underway in the US.
Samsung Electronics has committed more than $37 billion to its Texas semiconductor operations, while SK hynix is developing a chip packaging facility in Indiana worth more than $4 billion.
Hyundai Motor Group has pledged $26 billion in US investment through 2028, LG Energy Solution is building a $5.5 billion battery complex in Arizona, and Hanwha is pursuing a $5 billion expansion of its Philly Shipyard operations.
For these multiyear projects, relationships with Congress and state governments are becoming increasingly important, particularly when companies need permits, tax incentives or government procurement contracts.
The impact could vary significantly by industry.
Battery and solar manufacturers may benefit if Democrats resist further cuts to clean-energy incentives. Restoring benefits already withdrawn, however, would require new legislation.
For semiconductor companies, a key question is whether Congress will extend the construction-start deadline for semiconductor investment tax credits beyond 2026.
Senate Finance Committee leaders from both parties support an extension, but passage remains uncertain. Existing grants under the CHIPS Act are more closely tied to previously negotiated funding agreements.
Bipartisan efforts to reduce US dependence on China could also benefit Korean companies supplying American manufacturers, although restrictions on Chinese materials may increase production costs.
AI investment faces new uncertainty
The growing US artificial intelligence industry presents another challenge for Korean technology companies.
Trump’s December 2025 executive order sought to override certain state-level AI regulations, but left much of the approval process for data center infrastructure under state and local authority.
Democrats could push for stronger federal oversight of data centers amid concerns about rising electricity prices, while local opposition could slow construction and permitting.
Such delays could affect Korean semiconductor makers by slowing the expansion of AI infrastructure and demand for advanced chips, Shin warned.
For Korean companies, experts say the best response is to emphasize the benefits their investments bring to the US economy, regardless of which party controls Congress.
“They should highlight that these are products made in America for Americans. That is something both parties want,” Shin said.
He also urged Korean companies to secure skilled-worker visas and necessary state-level permits to prevent political and regulatory delays from disrupting their US operations.