Analyzing Key Policies and Global Economic Shifts in the Trump 2.0 Era

1. Core of Trump 2.0 Era's Key Policies

With President Trump back in office, he is strengthening "America First" through a series of executive orders and policies.
He is signaling major changes in global economics and approaches to climate change, undertaking efforts to withdraw or replace existing Biden administration policies.

2. Erasing the Biden Era

Withdrawal of Executive Orders

Approximately 78 policies pursued by the Biden administration are being withdrawn.
Most notably, the withdrawal from the Paris Climate Agreement is an attempt to exclude the United States from international climate change efforts.
A shift is underway from the existing 'ESG (Environmental, Social, Governance)' approach towards a focus on economic pragmatism.

3. Ending Inflation and Economic Policies

Addressing Inflation

Criticizing the Biden administration for failing to properly curb price increases, Trump prioritizes reducing living costs and controlling inflation.
In terms of tariff policy, while maintaining "America First," he will carefully adjust the timing and methods of tariff imposition to activate manufacturing and attract companies to the U.S.

Interest Rate Policy

Seeking to guide a relaxed monetary policy through collaboration with the Federal Reserve (Fed).
Aiming to accelerate economic recovery by fostering conditions to lower interest rates.

4. Energy Hegemony and Climate Change Transition

Development of Shale Oil and Natural Gas

Trump is focused on large-scale development and export reinforcement of shale oil and natural gas.
Transitioning the U.S. from a consumer to an energy self-sufficient and exporting nation, seeking to simultaneously stabilize international oil prices and control inflation.

Withdrawal from Paris Climate Agreement and Changes in ESG Stance

U.S. financial and banking industries are successively withdrawing from major climate change agreements (NGBA, NGFS, etc.).
Returning to a business approach centered on economic benefit and national priority, rather than the global trend of "climate change response".

5. Impact on Industry and Global Economic Order

Movements of Manufacturing and Global Companies

Similar to the U.S.-China trade war, there's a possibility of a revival of aggressive tariff policies demanding relocation of factories to the U.S.
Intensified competition is forcing structural movement of companies from South Korea, Europe, and China to the U.S. market.

International Paradigm Shift

A paradigm shift in the global economy toward de-centering ESG and re-focusing on fossil fuels.
With the weakening of the "Net Zero" stance, a decrease in renewable energy investment is possible, and the revival of traditional energy-centric industries is anticipated.

< Summary >

The Trump 2.0 era is prioritizing America First, withdrawing existing Biden administration policies, and presenting a new direction.

In particular, aiming to control inflation as a top priority, with reduced living costs as a main goal, and seeking energy hegemony through attracting manufacturing and developing shale oil.

With a weakening of the climate change response stance, significant changes are likely in the world's economic order. The pressure to realign toward the U.S. market will intensify for companies worldwide, including South Korea.

Crafted by Billy Yang
[Related articles at Next-Korea.com]
1. Global Economic Changes Expected in the Trump Era
2. Signals of Inflation Response and Interest Rate Reduction

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Analysis of Trump's Policies and US Economic Policy

1. US Interest Rate Policy Centered Around 2025

Current Status and Forecast of the Base Interest Rate
The current US base interest rate is maintained at 4-5%, and gradual interest rate adjustments are expected to manage both inflation and growth rates.
The US Federal Reserve (Fed) is expected to move cautiously and not rush to lower interest rates.
Neutral Interest Rate and Economic Growth
The neutral interest rate level for the US is considered to be around 3%, with the goal of adjusting the growth rate to 1-2% stably without stimulating prices through rate cuts.
There is a possibility that inflation will rise again to the mid-3% range in 2025.
Differentiated Interest Rate Policies Between Korea and the US

Korea may set a lower neutral interest rate due to domestic economic stagnation and price stability. While the US is considering global growth, Korea must focus on domestic stability.

2. Trump's Key Policies: Tax Cuts and the Use of Virtual Currencies

Tax Cut Policies and Inducing Corporate Investment
Trump is highly likely to induce companies to promote investment in the US through corporate tax cuts.
This will play an important role in restructuring the US global value chain and can support manufacturing, AI, and automated factory investments.
Potential Use of Virtual Currencies and Stablecoins
Trump has suggested the possibility of strategically using Bitcoin, and changes in the Federal Reserve's (Fed) policy will act as a major variable.
In particular, if stablecoins act as a new source of demand for US Treasury bonds, they could become a mechanism to solve the US government's debt problem.
To this end, it is important to maintain the relationship between the stablecoin market and the Bitcoin market.

3. Major Variables for the US Economy in 2025: Growth and Prices

Monetary Policy and Price Management
The Fed will maintain the base interest rate at a certain level to prevent prices from rising sharply.
It is expected to take a cautious approach to avoid stimulating economic growth while considering the risk of rising prices.
Harmonious Growth Strategies for Businesses and the Market
The US is highly likely to demonstrate policy flexibility to support internally-driven growth led by businesses.
It is expected to design policies centered around long-term growth potential rather than short-term changes in economic indicators.

< Summary >

The US is expected to pursue stable economic growth and price management by carefully adjusting the base interest rate through 2025.
Trump is seeking to promote growth through tax cuts and the use of virtual currencies, and is exploring the possibility of using stablecoins as a source of demand for US Treasury bonds.
Interest rate policies in the Korean and US economies are showing opposite directions, and Korea may choose a more radical interest rate cut to boost the domestic economy.