Abstract

With the election of President Trump in the 2024 U.S. presidential election, changes in policies related to the telecommunications network industry, which were pursued under the Biden administration, are expected. The U.S.-China conflict, which emerged prominently through the 5G telecommunications network strategy during the Trump administration, continued in the Biden administration, maintaining a similar basic direction. However, there were differences in the policy approaches and details between the two administrations. This report aims to compare the U.S. and China’s telecommunications network industry strategies under the Trump and Biden administrations, and then derive the characteristics and implications of the U.S.-China conflict.
There are three key differences in the strategic approaches to securing leadership between the Trump administration (first term) and the Biden administration. First, the Trump administration expanded investment incentives for major telecom companies by reducing corporate taxes and easing regulations for 5G deployment, which in turn promoted network construction. On the other hand, the Biden administration secured funding through tax increases to support government-led R&D, subsidies for small businesses, and the construction of networks in rural and underserved areas. Second, while the Biden administration sought to exclude China’s influence through multilateral cooperation with allied nations, the Trump administration preferred bilateral cooperation between individual countries and companies, aiming to exclude China. Lastly, there are differing regulatory philosophies regarding Big Tech, which is expected to play a central role in the transition of the telecommunications ecosystem. The Biden administration has actively pursued antitrust regulations against big tech, including corporate breakups, whereas the Trump administration supported antitrust regulations but opposed structural measures like corporate breakups, arguing that they do not contribute to strengthening competitiveness.
The U.S.-China conflict is a competition for centrality in the ecosystem network, which is different from the Cold War’s competition between exclusive national blocs. In this new form of competition, companies—components of the ecosystem—are connected beyond national borders. It is difficult for nations to sever these connections, and even if they do, these connections are often easily restored due to shared interests. In this context, the competition revolves around who can secure the most important ecosystem components and centrality within the network. Major countries are striving to maximize the competitiveness of these components, either through government-led private-sector initiatives, while trying to sever unfavorable connections limit the influence of other nations.
South Korea faces both benefits and losses arising from the U.S.-China conflict, and strategic responses to this transition are necessary. First, it is important to prepare for the potential bifurcation of the ecosystem due to the intensification of U.S.-China tensions under a second Trump administration. Unlike President Biden, President Trump prefers bilateral pressure and tariff increases rather than multilateral cooperation, which increases the likelihood of the ecosystem becoming divided. In the area of international standardization, there is a need to pay attention to whether the 3GPP will continue to push for a single standard, given China’s significant influence.
Second, South Korea must strengthen the competitiveness of its domestic companies to achieve centrality within the ecosystem network. To do so, it is essential to not limit the telecommunications network industry to the traditional dedicated equipment sector but to develop comprehensive policies that support the future network ecosystem, which is being transformed by open systems, virtualization, cloud computing, and AI. If South Korea does not possess the competitiveness to be part of the connectivity-enhanced target group, it will inevitably become dependent and not take a leading role in the bifurcated ecosystem.
Finally, more proactive industrial policies need to be implemented. South Korea’s industrial policies have generally relied on indirect support under the WTO regime, whereas the U.S. and China have already increased direct subsidies. While direct support may weaken under the second Trump administration compared to the Biden administration, the U.S. is likely to continue providing direct subsidies where needed. Although it may be difficult for South Korea to match the levels of the U.S. and China, it should consider direct support policies for key sectors.