Democrats have won both the Senate and House of Representatives in the US election. It is a sweeping Democratic victory. International affairs have always changed, and the US is no exception. What matters is not change itself, but distinguishing what changes from what remains the same and responding flexibly to each.
Tariffs, export controls and investment demands are expected to remain unchanged for the time being. They fall within presidential authority, and Trump, retaining veto power, will make more assertive use of government by executive order, an approach developed during the first term. What is changing is the politics surrounding data centers, the growth of state-level AI regulation and congressional oversight that will also examine Korean investment. Distinguishing between these areas leaves South Korea with 5 priorities.
First, South Korea must engage separately with the administration and Congress. The White House controls tariffs and investment implementation, while Congress controls investigations and oversight. Until now, engagement with the US has focused exclusively on the administration. Congressional channels must now be added to that approach. South Korea should ensure investment terms are transparent so it can explain the "opaque investment terms" questioned by Democrats, and strengthen diplomatic efforts to prevent congressional oversight from becoming a new trade barrier.
Second, South Korea must position itself where demand is moving. US data center construction is expected to be delayed. If that happens, AI demand will shift to places with available power and land. Data center development capacity in the Asia-Pacific region reached a record 26.5 GW in the first half of this year, and the SK Telecom and AWS data center in Ulsan could expand to 1 GW. A new market is emerging for exporting computing capacity itself.
The problem is speed. Malaysia and Japan are already taking action, while South Korea faces concentration in the Seoul metropolitan area, burdensome industrial electricity rates and slow permitting. A coordinated effort is needed, including an investment attraction package combining direct electricity trading outside the metropolitan area, distributed energy special zones and expedited permitting. However, global AI data center demand will not come to South Korea without action. Efforts to attract investment must be accompanied by the capacity to supply services that meet demand and regulatory standards in the US and other countries, including AI data sovereignty, reliability and safety requirements.
Third, South Korea must export the AI infrastructure supply chain, not just semiconductors. Semiconductors account for 41.8% of Korean exports, but US construction delays could eventually affect memory demand and order schedules. Conversely, as bipartisan efforts to contain electricity bills lead to requirements for data centers to generate their own power and share costs, demand for transformers, electrical steel, energy storage systems and cooling will grow. Large transformer exports have already increased 21.6% this year, with 70% going to the US. Memory companies should secure demand through long-term supply agreements with major US technology companies, while the government should support power equipment, cooling and batteries together as "AI infrastructure exports."
Fourth, South Korea must pursue opportunities in areas of bipartisan agreement. Support for semiconductor production and controls on China will continue regardless of the election results. Leaders from both parties on the congressional tax-writing committees have agreed on extending the Section 48D investment tax credit, which expires at the end of this year. Korean companies building US factories would benefit from aligning their investment schedules with the credit's extension. At the same time, a bipartisan bill has been introduced that would require allies to adopt US-level controls on China. Negotiations are therefore needed to formalize arrangements for equipment licensing at Korean companies' factories in China within a cooperative framework.
Related articles
Fifth, South Korea must establish standards proactively. Without a federal AI law, the US is seeing different regulations develop across its 50 states, while Europe is implementing its AI Act. Between these systems, South Korea must develop its AI Basic Act and institutions into effective, internationally recognized rules. To accommodate both US and European systems, standards for risk assessment, transparency and safety verification should be linked to international standards. Interoperability should be improved so Korean companies can enter multiple markets using a single compliance framework. The government's role is to provide companies entering the US with continuous monitoring that explains differing state laws, while offering consistent domestic standards compatible with both US and European requirements.
The US has entered a new period of uncertainty in which the president and Congress influence policy in different directions. That uncertainty will persist in changing forms. South Korea needs the flexibility to respond to enduring conditions through principles and to changing conditions through speed. Developing and implementing strategic responses that maximize national interests through careful assessment, rather than celebration or pessimism, is how South Korea can turn US uncertainty into opportunity.
The views expressed in this column may differ from the publication's editorial position.
Original Korean article: ZDNet Korea
English brief by Korea Wind Intelligence, koreawindintel.com
