While the United States and China have paused their trade war to avoid direct confrontation, the competition over semiconductors, artificial intelligence (AI), and critical minerals has entered a prolonged phase. Although some tariff barriers have been lowered, the trend of advanced technology and supply chains becoming intertwined with national security remains evident. This situation complicates the calculations for South Korea, which has production and sales networks in both countries.
According to reports from foreign media and the White House, U.S. President Donald Trump and Chinese President Xi Jinping reached an agreement on September 24 to partially resolve their trade conflicts. The two nations agreed to apply more favorable tariff treatment to non-sensitive goods worth $30 billion each and to activate a trade and investment consultation body.
For South Korea, which is heavily reliant on exports, a reduction in global trade uncertainty is a positive development. If the U.S. and China engage in high tariffs, it could lead to economic contraction in both countries, which would negatively impact South Korean exports.
However, unlike tariffs, barriers surrounding advanced technology remain largely intact. The U.S. and China have agreed to establish a dialogue channel called 'Super Intelligence (SI)' to discuss AI safety issues. Nevertheless, the easing of U.S. export controls on advanced AI semiconductors and semiconductor manufacturing equipment to China was not included in the main agreements.
South Korea finds itself at the center of this technological competition. Major domestic semiconductor manufacturers, Samsung Electronics and SK Hynix, operate semiconductor plants in China. The U.S. ended its 'Verified End User (VEU)' status for these plants at the end of last year, transitioning to an annual licensing system for the import of U.S.-made semiconductor equipment.
For domestic companies maintaining production bases in China, the burden of responding to U.S. technology controls remains significant. At the same time, Chinese companies are rapidly advancing.
Critical minerals, such as rare earth elements, also remain unresolved issues. The U.S. and China have agreed to continue discussions on supply chain disruptions related to these minerals, but a fundamental solution is still lacking. China controls a significant portion of the supply chain for rare earth mining, separation, refining, and permanent magnet production.
Given that rare earth elements are heavily utilized in key domestic industries such as automotive, robotics, and electronics, prolonged U.S. export controls or delays in permits could pose challenges for domestic production. Even if tariff conflicts ease, competition over supply chain dominance in semiconductors, AI, and critical minerals is likely to persist.
* This article has been translated by AI.
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