Kim Yong

SEOUL, Nov. 7 (UPI) — After the inauguration of the Donald Trump in January, the South Korean government and its corporations were pressed to invest hundreds of billions of dollars in the United States to avoid high tariffs.

Observers expressed concern Friday that such large-scale overseas investments could end up harming Asia’s fourth-largest economy, which heavily depends on the manufacturing industry.

Late last month, Seoul agreed to invest $200 billion in cash and $150 billion in shipbuilding and other industrial projects in the United States over the coming years, with an annual ceiling of $20 billion.

In return, Washington would reduce tariffs on Korean exports to 15% from 25%, honoring the terms agreed upon in late July. Trump also vowed to provide propulsion technology to help the key U.S. ally in East Asia build a nuclear-powered submarine.

The deal coincided with Trump’s visit to Korea to meet his counterpart, President Lee Jae Myung, on the sidelines of the Asia-Pacific Economic Cooperation Summit.

“Beginning next year, our annual investments in the United States are expected to double compared to 2025. When corporate funds move abroad, companies will have less capacity to invest at home,” Sogang University economics Professor Hur Jung told UPI.

“The problem is that it appears to become a long-term trend, which is feared to lead to the hollowing out of Korea’s manufacturing sector. The government is required to put forth great efforts to address this,” he said.

Hur recommended the country to prioritize traditional industries, such as semiconductors and automobiles, rather than concentrate on artificial intelligence-based innovations, which have been the main focus of the incumbent Seoul administration.

Other analysts note that the worries go beyond the $350 billion investment plan, as many Korean corporations have announced major spending initiatives in the United States to avoid high tariffs.

For example, Korea’s state-backed companies and private enterprises promised up to $150 billion in investments in the United States in August, when Lee had his first summit with Trump.

Back then, Hyundai Motor Group unveiled a plan to funnel $26 billion in the United States until 2028, while Hanwha Group committed $5 billion to expand its shipyard in Philadelphia, which the Korean conglomerate acquired late last year.

Korean Air also plans to purchase 103 aircraft from Boeing by the end of the 2030s, which is expected to total $36.2 billion in value.

“Korea Inc. invested $106 billion in domestic facilities last year. And its companies are now ready to spend $150 billion in the United States alone after a single meeting between the two countries’ political leaders in August. Does it make sense?” economic commentator Kim Kyeong-joon, formerly vice chairman at Deloitte Consulting Korea, asked rhetorically in a phone interview.

“Our foreign exchange reserves stand at just over $400 billion, and we are preparing to pour more than that amount into a single foreign market. Such an approach could weaken our ability to invest domestically, weighing heavily on the manufacturing-based economy,” he said.

According to the Organization for Economic Cooperation and Development, manufacturing accounts for 27% of South Korea’s gross domestic product, which is almost double the average among other member countries.

Against this backdrop, the Ministry of Trade, Industry and Resources is set to establish a forum involving related researchers and businesses to deal with the expected crisis. The Bank of Korea also warned of the gravity of the situation in an August report.

“As in past crises, our corporations, the government and households need to share a sense of urgency and work together to overhaul the country’s aging economic structure,” the central bank said at the time.

However, critics take issue with the complacency of top policymakers like Kim Yong-beom, chief presidential secretary for policy in the current administration, who downplayed fears about the hollowing out of the domestic manufacturing sector.

“Such assessments may be premature because many partner firms and key operations, including research and development centers, still remain based in Korea,” Kim told a conference in early September.

Sept. 10 (UPI) — The exit of 300 Korean workers detained in Georgia has been delayed due to “a cause from the U.S. side,” according to the South Korean Ministry of Foreign Affairs.

The detainees were scheduled to board a Korean Air charter plane from Atlanta’s Hartsfield-Jackson International Airport to head home Wednesday afternoon. The ministry hasn’t said what is causing the delay, The Korea Times reported.

“The government is continuing consultation with the U.S. for as swift a departure as possible. We will provide further updates once a new schedule is confirmed,” it said.

Homeland Security Investigations, Immigration and Customs Enforcement and other law enforcement conducted the raid on Thursday and said those who were detained are not authorized to work in the United States.

Three of those detained are from Japan, and others were from Central and South American nations.

The electric battery plant in Ellabell, Ga., near Savannah, is still under construction. It’s a joint project by Hyundai and LG Energy Solution to provide batteries for Hyundai electric vehicles.

Many of those working at the plant had B-1 visas, which are issued for short-term business travel, The Korea Herald reported.

Many others got electronic travel authorization to visit the United States, but neither B-1 visas nor the travel authorizations allowed their respective holders to work.

The Korean government has stressed that the workers will leave under the rules of voluntary departure, which don’t have the same legal consequences as deportation. But, U.S. immigration law allows for bans depending on the length of the unlawful stay, so individual penalties are possible.

Complicating matters, some detainees signed forms early on that included a $1,000 payment for voluntary departure to avoid a 10-year entry ban, The Korea Times reported.

Adding to the confusion, U.S. Secretary of Homeland Security Kristi Noem said Monday that the Korean nationals detained in the raid will be “deported.”

In South Korea, people are upset, said James Kim, chair and CEO of the American Chamber of Commerce in Seoul.

“The sentiment is obviously very, very negative,” James Kim, told CBS News. “In my office, I usually have my TV turned on to the news — and this is obviously covered from morning to evening constantly. But everyone who I speak to, they view America as its number — one partner here from South Korea. Yes, we’re going to have some challenging times.”

South Korean Foreign Minister Cho Hyun heard demands from angry lawmakers during a parliamentary session in Seoul on Monday, before he departed for meetings with Secretary of State Marco Rubio and other U.S. officials, CBS News reported.

Lawmaker Kim Joon-hyun demanded that Cho respond to the ICE raid by launching investigations into every U.S. national teaching English in South Korea who could be working illegally on a tourist visa.

“Are we giving our money, technology, and investment to the United States only to be treated like this?” CBS News reported that Kim Joon-hyun said.

During his meeting Wednesday in Washington with Cho, Rubio said, “the United States welcomes ROK (South Korea) investment into the United States and stated his interest in deepening cooperation on this front,” according to a readout shared by the State Department.

Rubio and Cho discussed advancing U.S.-South Korean ties “through a forward-looking agenda” that “revitalizes American manufacturing through ROK investment in shipbuilding and other strategic sectors, and promotes a fair and reciprocal trade partnership,” the State Department said.

Seoul and Washington have clashed over administrative and technical procedures, including the terms under which the Koreans are released and the conditions for their transfer to the airport, The Korea Herald reported.

Kim Yong-beom, presidential chief of staff for policy, on Tuesday also said that “(U.S.) law enforcement authorities have their own methods they insist on when it comes to transporting detainees by bus.

“They insist on certain practices, such as handcuffing detainees again, but we are making every effort in the final administrative negotiations to ensure that such methods are not applied,” Kim Yong-boem said.

“We are working to complete the procedures so that our nationals can safely return in the form of voluntary departure, not deportation, and are striving to conclude this within a timely period – within a day or two.”

The drive from the ICE detention facility in Folkston, Ga., to the Atlanta airport takes about four and a half hours.

SEOUL, July 31 (UPI) — U.S. President Donald Trump announced Wednesday that the United States will impose a 15% tariff on South Korean goods in what he called a “full and complete trade deal” between the two countries ahead of an Aug. 1 deadline for negotiations.

The deal calls for $350 billion in South Korean investments “owned and controlled by the United States and selected by myself,” Trump wrote on his Truth Social platform.

Seoul will also purchase $100 billion of U.S. liquified natural gas and will announce further investments when South Korean President Lee Jae Myung visits Washington “within the next two weeks,” Trump said.

The arrangement comes just ahead of the Aug. 1 deadline for countries to make deals with Washington before facing higher “reciprocal” tariffs. South Korea was facing a 25% levy if it had not reached an agreement.

“We have overcome a major hurdle,” South Korean President Lee Jae Myung wrote on Facebook Thursday. “Through these negotiations, the government has eliminated uncertainty in the export environment and aligned U.S. tariffs with those of our major export competitors, creating an environment where we can compete on equal or superior terms with major countries.”

Lee said that $150 billion of the announced investment is earmarked for South Korean companies to enter the United States shipbuilding sector. Seoul had touted its world-class capacity as a key negotiating card, as the Trump administration is looking to revive the moribund American shipbuilding industry to counter China’s massive naval growth.

The 15% tariffs will apply to South Korea’s automobile industry — its largest export sector to the United States — U.S. Commerce Secretary Howard Lutnick wrote in a post on X.

“[South Korea] will also not be treated any worse than any other country on semiconductors and pharmaceuticals,” he added.

The major South Korean exports of steel and aluminum will remain at the global rate of 50% that Trump has set, however.

Seoul was able to hold off Washington’s push to further open up its rice and beef markets to U.S. imports, which farmers’ groups in South Korea strongly opposed.

“In the course of the consultations with the United States, there was a strong demand for the opening up of our agricultural and livestock markets,” Kim Yong-beom, the presidential chief of staff for policy, said at a press briefing Thursday.

“However, given food security and the sensitivity of our agriculture, it was agreed that the domestic rice and beef markets would not be further opened,” Kim said.

While South Korea avoided higher tariffs with the new deal, it still represents a major increase over the existing U.S.-Korea Free Trade Agreement, under which roughly 95% of goods were duty-free.

“The 15% tariff by the United States is a different trading environment and challenge than in the past,” Kim said. “The government will actively support our companies in enhancing their competitiveness and diversifying their export markets.”

The South Korean trade deal follows others the Trump administration has made in recent weeks, including 15% reciprocal tariffs on Japan and the European Union, 19% on the Philippines and Indonesia and 20% on Vietnam.