Business

SEOUL, Jan. 27 (UPI) — South Korea will dispatch a delegation of senior trade and industry officials to Washington after U.S. President Donald Trump announced a sharp increase in tariffs on Korean goods, the Ministry of Trade, Industry and Resources said Tuesday.

Trade Minister Yeo Han-koo and Industry Minister Kim Jung-kwan will travel to the United States to meet their counterparts for talks on the tariff hike, the ministry said in a press release.

The decision was made at an emergency interagency meeting chaired by presidential chief of staff for policy Kim Yong-beom, convened hours after Trump’s surprise announcement on social media.

Trump said he was raising his so-called “reciprocal” tariffs on South Korea from 15% to 25%, accusing Seoul’s National Assembly of failing to act quickly enough to implement a bilateral trade deal finalized late last year.

“South Korea’s Legislature is not living up to its Deal with the United States,” Trump wrote earlier Tuesday on his Truth Social platform.

He said the higher tariffs would apply to automobiles, lumber, pharmaceuticals and other goods covered by the agreement.

The legislation to implement the deal was submitted to the National Assembly by the ruling Democratic Party in November but has yet to be passed.

Kim, who is currently in Canada, will travel to Washington as soon as his schedule allows to meet with U.S. Commerce Secretary Howard Lutnick, according to the ministry. Yeo will depart from Seoul to hold talks with U.S. Trade Representative Jamieson Greer.

Trump and South Korean President Lee Jae Myung finalized trade negotiations on the sidelines of the Asia-Pacific Economic Cooperation forum in Gyeongju on Oct. 29.

The two sides released a fact sheet in November detailing the terms of the deal, under which Trump’s tariffs on South Korean goods, including automobiles, would be reduced from 25% to 15%.

In exchange for the lower tariffs, South Korea pledged to invest $350 billion in the United States, including $150 billion in the U.S. shipbuilding sector and $200 billion for strategic industries under a memorandum of understanding to be signed by the two governments.

The fact sheet also formalized Washington’s approval of Seoul’s long-sought plan to build nuclear-powered submarines, a capability South Korean officials have framed as part of broader industrial and security cooperation with the United States.

The tariff move comes amid a dispute involving a South Korean regulatory probe into Coupang, a U.S.-listed e-commerce company, following a large-scale data breach.

On Friday, South Korean Prime Minister Kim Min-seok said he addressed the matter directly in talks with U.S. Vice President JD Vance, stressing that American firms had not been unfairly targeted.

“I made it clear that there has been no discriminatory treatment against U.S. companies,” Kim told Korean correspondents in Washington, D.C.

Following Tuesday’s emergency meeting, South Korea’s presidential office said it would react “calmly” to the announced tariff increase.

“Since the tariff increase will only take effect after administrative procedures such as publication in the Federal Register, the Korean government plans to calmly respond while conveying its commitment to implementing the tariff agreement to the U.S. side,” presidential spokeswoman Kang Yu-jung said in a written briefing.

South Korean stocks initially fell on the tariff news, with the benchmark KOSPI dropping by 0.84% in the first 15 minutes of trading before reversing early losses to gain 2.73% and close at an all-time high of 5,084.85.

Jan. 26 (UPI) — Treasury Secretary Scott Bessent announced Monday that the department canceled all contracts with consulting firm Booz Allen Hamilton because of a data leak that included President Donald Trump‘s tax returns.

The department has 31 contracts with Booz Allen for a total of $4.8 million in annual spending and $21 million in total obligations, a press release said.

“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Bessent said in a statement.

Between 2018 and 2020, a Booz Allen employee, Charles Edward Littlejohn, “stole and leaked the confidential tax returns and return information of hundreds of thousands of taxpayers.”

The breach affected about 406,000 taxpayers, including Trump, Amazon founder Jeff Bezos and Tesla CEO Elon Musk.

“Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service,” Bessent said.

Littlejohn pleaded guilty in October 2023 to one charge of disclosure of tax return information and was sentenced to five years in prison. He admitted to leaking Trump’s tax information to The New York Times and leaking other tax information to ProPublica.

Booz Allen’s stock price dipped by 8% on the news, CNBC reported.

Jan. 26 (UPI) — Critical minerals startup USA Rare Earth announced Monday that the Department of Commerce will give the company a $1.3 billion loan and $277 million in federal funding.

USA Rare Earth will issue Commerce 16.1 million shares of common stock and 17.6 million in warrants. The federal government will have an 8% to 16% stake in the company, depending on whether it uses the warrants, a filing with the Securities and Exchange Commission said.

USA Rare Earth shares rose more than 20% Monday after the announcement, CNBC reported.

The injection of funds will help the company build a magnet manufacturing plant in Stillwater, Okla., and a mine at the Round Top mineral deposit in Sierra Blanca, Texas.

CEO Barbara Humpton said the government deal will turn USA Rare Earth into an industry leader.

“This is a watershed moment in our work to secure and grow a resilient and independent rare earth value chain based in this country,” CNBC reported that Humpton told analysts Monday.

“We have long said that meeting the urgent call to reassure the rare earth and critical minerals industry will require a multiplayer solution, and this establishes our company as one of the leaders,” she said.

Commerce will allocate the funding from 2026 through 2028 based on milestones in USA Rare Earth’s business plan, Chief Financial Officer Rob Steele told analysts.

The company needs about $4.1 billion for its plan, he said. It still needs to raise about $600 million more capital.

“We believe we can raise the remaining capital from attractive sources, and you should assume that’s equity capital but that can come from strategic investments as well as institutional investors,” Steele said.

China dominates the global supply chain of rare earth materials. During trade disputes with President Donald Trump, Beijing tried to cut off rare earth exports.

“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” Commerce Secretary Howard Lutnick said in a statement. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”

“The Department of Energy is ending America’s reliance on foreign nations for the critical materials essential to our economy and national security,” said U.S. Energy Secretary Chris Wright in a statement. “The DOE is partnering with USAR to rebuild the critical minerals supply chain. By expanding domestic mining, processing and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security.”

“Accelerating the onshoring of rare earth minerals, metals, and magnets is paramount to national and economic security,” U.S. Investment Accelerator Executive Director Michael Grimes said in a statement. “With the Department of Commerce’s funding for USA Rare Earth’s vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defense and numerous other industries strategic to the United States.”

SEOUL, Jan. 26 (UPI) — South Korea’s cash-strapped discount chain Home Plus said Monday that it was waiting for an infusion of $210 million emergency operating funds from its stakeholders and state-run Korea Development Bank.

The retailer requested its shareholder, MBK Partners, creditor Meritz Financial Group, and KDB each to provide $70 million to help the company stay afloat while it searches for a new owner.

MBK Partners has pledged to offer its share of the funding, but Meritz and KDB have yet to disclose their positions, according to Home Plus.

Speaking at a National Assembly meeting last Wednesday, Home Plus CEO Joh Joo-yun said that the company is in a grave situation.

“Deliveries to Home Plus stores have plunged to about half their previous levels,” she said. “If emergency funding is not secured within January, we may be unable to pay employee wages or even settle payments for merchandise.”

Under such circumstances, Joh worried that it might be impossible to achieve a turnaround.

Meanwhile, the Seoul Central District Court earlier this month rejected prosecutors’ requests for arrest warrants for MBK Partners Chairman Michael Byungjoo Kim and other executives from the private equity fund and its portfolio company Home Plus.

Prosecutors sought to detain them in connection with asset-backed bonds issued by Home Plus in February, shortly before the firm filed for court receivership in early March.

They argued that such conduct may have exposed investors to potential losses, constituting fraud and violations of the relevant laws.

However, the court stressed the need to ensure that the suspects have sufficient opportunity to defend themselves without being held in custody.

In 2015, MBK took over Home Plus from Tesco in a deal valued at roughly $5 billion. In recent years, the retailer has faced mounting difficulties due to the fallout from the COVID-19 pandemic and intensifying competition from e-commerce rivals.

Against this backdrop, Home Plus has sought to find a new buyer, but such efforts have so far made little progress.