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In South Korea, Joe Biden Seeks to Rebuild Economic Ties Across Asia

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PYEONGTAEK, South Korea — President Biden began his first diplomatic mission in Asia on Friday by touring a Samsung semiconductor facility in South Korea, a part of his effort to strengthen the waning economic influence of the USA within the region and to deal with supply chain problems which have hurt American consumers back home.

Shortly after landing at Osan Air Base, Mr. Biden joined President Yoon Suk-yeol of South Korea on the Samsung plant, praising it as a model for the sort of manufacturing that the USA desperately needs to go off soaring inflation and to compete with China’s growing economic dominance.

“That is an auspicious begin to my visit, since it’s emblematic of the long run cooperation and innovation that our nations can and must construct together,” Mr. Biden said, adding that Samsung will invest $17 billion to construct an analogous plant in Taylor, Texas.

The choice to start a five-day trip to South Korea and Japan, his first to the region as president, with a visit to a semiconductor facility underscored the complexity of a tour meant to strengthen security ties, forge latest economic pacts and reassure allies of America’s commitment within the Indo-Pacific after months of prioritizing the war in Ukraine and years of ceding influence to Beijing.

While competing more aggressively with China has been a central goal of Mr. Biden’s foreign policy, the administration also views its allies within the Indo-Pacific as key partners because it tries to unsnarl the availability chain and reboot American manufacturing.

“Our two nations work together to make the very best, most advanced technology on the planet,” Mr. Biden said on the plant, surrounded by monitors showing Samsung employees listening to his remarks. “And this factory is proof of that, and that offers each the Republic of Korea and the USA a competitive edge in the worldwide economy if we are able to keep our supply chains resilient, reliable and secure.”

But countries within the region have been wary of economic assurances from Washington for the reason that Trump administration withdrew from the Trans-Pacific Partnership, an American-negotiated trade pact meant to counter Beijing.

When Mr. Biden travels to Japan for the second leg of his trip over the weekend, he is predicted to unveil the brand new Indo-Pacific Economic Framework, outlining priorities equivalent to digital trade and provide chain resilience amongst allies. Nevertheless it was unclear how many countries would sign on for a latest economic strategy that falls well wanting a proper trade agreement.

Even Rahm Emanuel, the U.S. ambassador to Japan, said on Thursday that governments within the region are still asking, “What’s it we’re signing up for?”

Scott A. Snyder, the director of U.S.-Korea policy on the Council on Foreign Relations, said Mr. Biden’s proposal is basically “a latest packaging of existing Biden administration priorities on this economic policy area.”

“And whether or not it really takes off is dependent upon whether partners imagine that there’s enough there there to justify being engaged,” he said.

Mr. Snyder added that he thought South Korea was taking seriously the Biden administration’s commitment to speculate within the region. “I feel they’re believing,” he said. “And we’ll see whether or not they’re whistling past the graveyard.”

Through the visit to the plant, Mr. Biden made clear that his focus was not only on growing America’s influence abroad, but in addition on addressing domestic policy challenges in the USA. While demand for products containing semiconductors increased by 17 percent from 2019 to 2021, there has not been a comparable increase in supply, partly due to pandemic-related disruptions.

Consequently, prices for automobiles have skyrocketed, and the necessity for more chips is prone to increase as 5G technology and electric vehicles turn into more widespread.

The US already faces an “alarming” shortage of the semiconductors, Gina Raimondo, Mr. Biden’s commerce secretary, warned this yr, adding that the crisis had contributed to the very best level of inflation in roughly 40 years.

The soaring consumer prices have helped to drive down approval rankings for Mr. Biden, who has seized on global supply-chain problems to induce Congress to pass proposed laws that will provide $52 billion in grants and subsidies for semiconductor makers and $45 billion in grants and loans to support supply-chain resilience and American manufacturing.

The Samsung stop was only one effort to encourage Asian allies to speculate in the USA. On Sunday, Mr. Biden will join the chairman of Hyundai to have fun the South Korean company’s decision to speculate in a latest electric vehicle and battery manufacturing facility in Savannah, Ga.

With questions hanging over his administration’s economic strategy in Asia and a producing bill stuck in Congress, Mr. Biden is hoping to search out a helpful partner in South Korea, said Daniel Russel, a vp on the Asia Society who was assistant secretary of state for Asia within the Obama administration.

“I feel that the connection, which is already quite strong, can flourish,” Mr. Russel said. “There’s a powerful convergence of views between the Biden team and the Yoon team on security policy, including concerns about China, the necessity for global cooperation and dealing together on semiconductors and trade.”

How the Supply Chain Crisis Unfolded

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The pandemic sparked the issue. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis might be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

A discount in shipping. With fewer goods being made and fewer individuals with paychecks to spend at the beginning of the pandemic, manufacturers and shipping firms assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.

Demand for protective gear spiked. In early 2020, your entire planet suddenly needed surgical masks and gowns. Most of those goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear across the globe.

Then, a shipping container shortage. Shipping containers piled up in lots of parts of the world after they were emptied. The result was a shortage of containers within the one country that needed them probably the most: China, where factories would begin pumping out goods in record volumes.

Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.

Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the supply of shipping containers, and the fee of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.

Mr. Yoon, a conservative politician and a former prosecutor, is one in all the leaders within the region who has welcomed the Biden administration’s traditional approach to foreign policy after the chaotic years of President Donald J. Trump. Soon after Mr. Yoon was elected in March, he sent a delegation of senior advisers to Washington to construct ties with the Biden administration.

Sue Mi Terry, director of the Asia program on the Wilson Center in Washington, said she expected Mr. Biden and Mr. Yoon to have natural chemistry. “While President Yoon has a stern image as a former prosecutor, he is definitely folksy, middle class, and right down to earth — identical to the ‘abnormal Joe’ within the White House,” she said.

The Yoon administration has been coordinating with U.S. officials on sanctions against Russia and has also agreed to abide by export controls on critical technologies. Although South Korea stays a serious buyer of Russian oil, it has signaled that it’s attempting to bring down those purchases. Based on people accustomed to his pondering, Mr. Yoon can be looking for to discover which supply chains might be moved out of China for greater economic security.

Mr. Biden and Mr. Yoon are scheduled for a bilateral meeting in Seoul on Saturday. Beyond China, escalating tension with North Korea is prone to be a spotlight. Compared along with his predecessor, Moon Jae-in, Mr. Yoon has taken a harder line on the North and doubtless will seek to debate missile technology and deployment with the USA during Mr. Biden’s visit.

Jake Sullivan, Mr. Biden’s national security adviser, said in the course of the president’s flight to South Korea that Washington was prepared for a possible nuclear test or missile test from the North, which in March ended its self-imposed moratorium on intercontinental ballistic missile tests.

“There’s a real possibility, an actual risk of some form of provocation while we’re within the region,” Mr. Sullivan said from Air Force One. “I feel all it might do is underscore one in all the major messages we’re sending on this trip, which is the USA is here for our allies and partners.”

Peter Baker contributed reporting from Seoul, Edward Wong from Washington and Motoko Wealthy from Tokyo.

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