Kim Jung-kwan Heads to US as Coupang Emerges as Wild Card in Investment Push

The foreign and trade ministers of Korea and the US are set to meet again in the United States, in what analysts see as accelerating momentum for talks on the first major Korean investment in the US. Eight months have passed since the "Korea-US Strategic Investment Memorandum of Understanding (MOU)" was signed, and the Korea-US Strategic Investment Corporation, which will execute US investments, has been in full operation since last month, making it increasingly difficult to delay the announcement of the first investment project. However, concerns are emerging that negotiations could face difficulties, as a perception is spreading in US political circles that the Korean government's intervention in Coupang is excessive.

According to relevant ministries on the 19th, Industry and Trade Minister Kim Jung-kwan plans to visit the US to attend the opening ceremony of the Korea-US Shipbuilding Cooperation Center, to be held in Washington, D.C. on the 23rd. The event will be attended by Minister Kim as well as top executives from the three major shipbuilders, including HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean. On the US side, Commerce Secretary Howard Lutnick is expected to attend.

It will be the first time the two have met at an official event in 76 days, since the signing ceremony for the Korea-US Shipbuilding Partnership Initiative MOU on May 8. Government insiders expect there is a strong possibility that Minister Kim and Secretary Lutnick will hold a separate closed-door bilateral meeting around the event. Foreign Minister Cho Hyun is also expected to meet US Secretary of State Marco Rubio to discuss pending issues between the two countries at the ASEAN Regional Forum (ARF) to be held in Manila, the Philippines, from the 21st to the 23rd.

In particular, finalizing Korea's first US investment project is an urgent task. The US has reportedly conveyed complaints through various channels that "the selection process for the first investment is too slow." A government official explained, "When US President Donald Trump hinted at raising tariffs in January this year, saying that Korean and Japanese investments in the US were too slow, we could still blame delays in the National Assembly's legislative process." He added, "It is true that now, with the Korea-US Strategic Investment Corporation launched, there is little justification for delaying investment." Kim Yong-beom, chief of the Presidential Office's policy planning, also appeared on a broadcast that day and said, "We are conducting a detailed analysis of the investment list sent from the US," adding, "We are preparing so that the first US investment can materialize in August-September."

As the investment review drags on, US demands for investment are growing not only in the energy and critical minerals sectors, as previously reported, but also in the semiconductor industry. On the 9th, Secretary Lutnick attended the concrete pouring ceremony for a fab that Micron is building in Clay, New York, where he said, "I would like to bring competitors Samsung Electronics and SK hynix to the US to build production facilities."

The government is drawing a line, saying that semiconductor fabs are unrelated to the US investment project. However, with memory companies such as Samsung Electronics and SK hynix recently earning enormous sums from US companies—with operating profit margins exceeding 80%—investment pressure is bound to grow in one form or another. A senior business official explained, "The news that Samsung and SK will invest 4,800 trillion won in Korea has already reached the US, making 200 billion dollars (about 300 trillion won) seem too small a figure," adding, "The US is looking for a pretext to pressure Korea, and one of them could be Coupang."

To make matters worse, concerns have been raised that the Coupang issue could emerge as a variable in the US investment negotiations. The Korean government's measures on Coupang's personal information leak are being perceived in US political circles as "discrimination against a US company." In fact, the US House Judiciary Committee recently released a report claiming that the Korean government is waging a "whole-of-government attack" against US company Coupang, while the White House also issued a message stating, "We are deeply concerned about the situation in which the Korean government is discriminatorily targeting US tech companies."

Kang Kyung-wha, the ambassador to the US who temporarily returned home at the instruction of Minister Cho, also diagnosed in a meeting with reporters, "The Coupang issue is an issue that is lasting much longer than I had thought." Kim Tae-hwang, professor of international trade at Myongji University, interpreted the situation by saying, "It has already been confirmed since last year that Coupang is conducting large-scale lobbying in US political circles," adding, "The US also has an incentive to use the Coupang issue to increase pressure in digital trade areas such as platform laws."

For now, the government plans to explain to the US government and Congress that the measures against Coupang are not a discriminatory response targeting a specific company but a procedure in accordance with domestic law, while pursuing the US investment project separately from the Coupang issue. Ambassador Kang said, "We are conducting consultations at various levels to advance the contents of the fact sheet agreed upon by the two leaders, while managing the Coupang issue on its own terms." Yeo Han-koo, head of the Office of Trade Negotiations at the Ministry of Trade, Industry and Energy, also drew a line at the time the US launched its Section 301 trade investigation, saying, "Trade issues and Coupang have nothing to do with each other," and stressed, "The Coupang case is an incident involving the leak of personal information of 80% of the Korean population."

However, the government too appears to be grappling with the Coupang issue in connection with US diplomacy and trade matters. The Presidential Office's National Security Council (NSC), which Ambassador Kang attended after temporarily returning home, was reportedly attended by additional members beyond the existing ones, including Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, Fair Trade Commission Chairman Joo Byung-ki, and officials from the Ministry of Trade, Industry and Energy. It is unusual for an ambassador to temporarily return home when there is no matter such as a bilateral summit, and it is also uncommon for economic officials to attend the NSC. This means that the regulatory issue over Coupang, trade tasks, and US diplomacy are being coordinated at once from a national security perspective. Professor Kim pointed out, "It is dangerous to set a precedent in which an individual company's lobbying influences trade issues between countries," noting the need to manage the Coupang issue so that it does not rise to the level of an official trade agenda.