Donald Trump’s victory in the US presidential election earlier this month, securing another four-year term as the leader of the world’s most powerful country, has sent shockwaves across the globe and through various sectors on a magnitude and scope not seen in many years.

Not only experts and scholars but also the general public, including small retail investors and office workers, have actively debated the changes Trump is likely to bring about when he takes office in two months and the effects of those changes on how we live, think and make decisions.

While the full details and significance of these changes will only emerge after the Trump administration announces its policies, people have already begun to talk about the direction of such policy shifts on several subjects, based on remarks by him and by officials and organizations linked to him.

Along with the likely imposition of high import tariffs on products made in China, Trump is also widely expected to make a drastic shift in the US administration’s policy approach to artificial intelligence innovation -- a shift whose implications are increasingly concerning to South Korea.

Many in South Korea are worried because the Trump administration’s AI policy is expected to shift toward supporting US companies as part of his aim to counter China’s growth, potentially leading to a rapid widening of the already significant gap in competitiveness between US and South Korean industries.

Trump vowed on the campaign trail to repeal President Joe Biden's Executive Order on AI, which established safety testing and transparency requirements for federal agencies and AI designers under the Defense Production Act. This means US companies will likely have more freedom to focus on technology development rather than on preparing measures against unrealized risks.

While details of the US AI policy under a second Trump term, starting in late January 2025, remain unconfirmed, the Center for AI Policy recently predicted that he would likely “radically scale back” regulation and prioritize “promoting American competitiveness, particularly regarding China.”

The Trump administration is also expected to pursue increased federal support for autonomous vehicle adoption. Waymo, a subsidiary of Alphabet, the parent of Google, now provides 150,000 driverless taxi rides per week, up sharply from about 50,000 in May. This trend will likely continue, driving further AI technology development among the US industry.

Experts in Seoul emphasize that President Yoon Suk Yeol’s government must expedite support measures to help local companies compete in a global race increasingly dominated by US and Chinese giants.

They predict the Trump administration will take a more hands-off approach to AI regulation, tighten export restrictions not only on manufacturers in the US but those in other countries to limit China’s access to advanced AI chips, solidify the US lead in AI development, and allow more AI company acquisitions.

Based on these projections, experts in Seoul believe international debates on AI governance, which have largely centered on the European Union AI Act’s principles until now, will shift toward compelling other nations to adjust their strategies toward alignment with the US administration’s approach.

Of course, South Korea’s government has consistently distanced itself from the EU’s prescriptive restrictions based on pre-classified risk levels on the surface, opting instead for an approach that balances fostering innovation and devising regulatory measures against emerging risks.

However, industry representatives and private-sector experts have called for implementation of a more comprehensive set of binding rules to accompany effective government support measures. Without these, both AI developers and users may struggle to promote the development and utilization of new AI systems.

Although regulatory agencies like the Personal Information Protection Commission have issued guidelines on AI-related issues, South Korea has yet to enact a framework law on AI.

For instance, while the AI Safety Institute is being established under the Electronics and Telecommunications Research Institute, it remains constrained by the lack of binding legislation. In this context, the National Assembly’s Science, ICT, Broadcasting and Communications Committee’s upcoming vote on a unified law draft is a welcome step.

South Korea was an early adopter in the global AI wave, building on its successful recovery from near sovereign bankruptcy in the late 1990s through massive investment in Internet-related industries.

However, the government now faces challenges in expanding its role, as public opinion grows increasingly resistant to direct support for large corporations, and the nation’s dwindling tax revenue limits fiscal options.

When presiding over the inaugural meeting of the Presidential Committee on AI in late September, President Yoon vowed to mobilize all available national resources to make South Korea a global AI leader after the US and China. Yet, he has resisted calls for increased fiscal support, adhering to the conflicting goal of curbing budget growth.

Yoo Sang-im, Minister of Science and ICT, recently admitted during a parliamentary session that South Korea risks falling behind in the global AI race, as competing nations such as France have significantly outpaced its cautious approach with robust investment.

But time waits for no one.

Under Trump’s presidency, the competition is likely to evolve into a nation-to-nation dynamic rather than one between companies, highlighting the urgency for South Korea’s government to reassess its strategy of pledging support while avoiding substantial financial backing.

Yoo Choon-sik

Yoo Choon-sik worked for nearly 30 years at Reuters, including as the chief Korea economics correspondent, and briefly worked as a business strategy consultant. The views expressed here are the writer’s own. -- Ed.