U.S. President Donald Trump’s nominee for commerce secretary, Howard Lutnick, told the Senate Committee on Commerce, Science and Transportation on Jan. 29 that he could not commit to honoring the CHIPS and Science Act without first reviewing it. His remarks signal a possible reconsideration of subsidy agreements, raising concerns over the multi-billion-dollar deals Samsung Electronics and SK Hynix struck under the Biden administration.

Lutnick emphasized boosting local production in key sectors such as semiconductors, automobiles, steel, and home appliances. Industry experts warn this could intensify “Trump risks” for Korean manufacturers. Given that Trump only vaguely pledged to rebuild America’s manufacturing base during his Jan. 20 inauguration, Lutnick’s comments are seen as the first concrete indication of the administration’s second-term trade and industrial policies.

Howard Lutnick, nominee for U.S. commerce secretary, answers questions during his confirmation hearing before the Senate on Jan. 29, 2025./Reuters Yonhap News

When asked whether he would continue federal CHIPS program funding for chip manufacturers, Lutnick said that while he wouldn’t commit unconditionally to agreements he hadn’t reviewed, he would uphold finalized contracts.

“To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get the benefit of the bargain,” he said, describing the CHIPS Act as “an excellent down payment in our ability to bring semiconductor manufacturing back to America.”

However, Lutnick hinted at reviewing the agreements to ensure “we get it right.” His stance echoes President Trump’s earlier dissatisfaction with subsidies for foreign semiconductor firms. Trump has suggested that imposing high tariffs on overseas chipmakers could compel them to build plants in the U.S.

SK Hynix secured $458 million in direct subsidies and up to $500 million in government loans on Dec. 19, 2024, followed by Samsung Electronics’ $4.745 billion subsidy agreement with the U.S. government the next day. Intel, TSMC, and Micron also received subsidy commitments.

Analysts speculate that the Trump administration’s remarks may be a strategic move to pressure companies into making greater concessions.

“In a situation where it’s difficult to maintain competitiveness without subsidies, this could be a negotiation tactic,” said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association. “It seems more about accelerating investment commitments rather than outright denying subsidies.”

U.S. President Donald Trump signs executive orders and pardons for Jan. 6 defendants in the Oval Office at the White House on Inauguration Day, Jan. 20, 2025./Reuters Yonhap News

Lutnick also advocated ending a subsidy program for leased electric vehicles, which Hyundai Motor has benefited from. Asked by Senator Bernie Moreno about the $7,500 subsidy extended to leased luxury vehicles under the Inflation Reduction Act, Lutnick criticized the program, calling it “an example of failed industrial policy that needs to be changed.”

The nominee further cited Japan’s steel and South Korea’s home appliance sectors as examples of countries that have “taken advantage of America’s good nature.” He emphasized the need for South Korea and Japan to partner with the U.S. by increasing their local manufacturing, saying, “It’s time for them to bring that production back home.”

Observers warn that the U.S. may revive Section 232 of the Trade Expansion Act, which restricts imports for national security reasons.

“The Trump administration previously considered applying Section 232 to automobiles after steel,” said Chang Sang-sik, head of the Korea International Trade Association’s international trade research institute. “There’s a high possibility of renewed pressure to expand local production of key products.”