U.S. presses Korea over slow progress on $350 billion investment pledge

The United States reportedly expressed dissatisfaction over Korea’s slow implementation of its promised $350 billion investment, raising concerns that the delay could become an additional source of friction between the countries.

“The main point of the U.S. side’s recent and repeated complaints to us is clear,” a senior ruling party official told the JoongAng Ilbo on Monday. “Essentially, they’re asking why there hasn’t been at least some progress on U.S.-bound investment, following many pending issues between Korea and the United States.”

Seoul pledged a $350 billion investment package in exchange for lower U.S. tariffs last November.

Last year’s Coupang data breach has already caused tension between the two countries.

The U.S. House Judiciary Committee released a report titled “South Korea’s Discriminatory Attacks on American-owned Businesses” on July 1. The document argues that the Korean government has been targeting U.S.-affiliated companies, including Coupang.

“By any reasonable measure, Coupang is being singled out by the Lee government,” a White House official told Yonhap the following day, echoing the report.

The U.S. State Department again indicated its concern after the Korean government revised the Act on Promotion of Information and Communications Network Utilization and Information Protection on Wednesday, stating that the act should not be used to censor freedom of expression.

Progress in U.S.-bound investment could help ease tensions, but implementation has remained slow.

The National Assembly passed a special act to support the implementation of the $350 billion investment package in March, which only took effect on June 18 after a three-month grace period. A committee overseeing U.S.-bound investment projects was then launched on June 23, but its steering committee began operations on July 2.

The government plans to review the commercial viability of the investment projects — proposed by the United States in May — and report the results to the National Assembly next month. Some projects may require parliamentary approval.

“From the U.S. perspective, the fact that Korea has enacted a law and established relevant organizations [to move ahead with the investment] is a secondary issue,” a source who requested anonymity said. “What ultimately matters is visible results showing where the money will be invested, but there is still nothing concrete to present.”

But finding profitable projects has reportedly been difficult.

“Companies are expected to participate in these projects, so they must have the potential to generate profits,” the source added. “But among the candidate projects proposed by the United States, it has not been easy to find commercially viable ones.”

The situation is similar to January, when U.S. President Donald Trump warned that tariffs on Korean automobiles and other products would be raised back to 25 percent from 15 percent due to delays in the National Assembly’s passage of the special act.

Although the legal framework has now been established, the overall dynamic remains similar, with the United States pressing for tangible results while Korea takes time to complete domestic procedures.

Concerns also remain regarding Korea-U.S. security talks. While talks resumed in June — seven months after the release of the joint fact sheet from a bilateral summit — they have stalled once again. Though two sides have sought to hold a second round of talks in Washington as early as this month, they have yet to finalize a schedule.

“The delay in arranging follow-up talks is being influenced more by the U.S. domestic political situation,” a source from Korea’s ruling party said. “Still, with various complaints from [their] side, this delay in security consultations is not a positive sign.”

The two governments also appear to be sending different signals about semiconductor investment.

U.S. Commerce Secretary Howard Lutnick specifically called on Samsung Electronics and SK hynix to build semiconductor production facilities in the United States when visiting Micron Technology’s fabrication plant construction site last Thursday.

“Micron is leading the way, and the competitors are going to be jealous and ultimately have no choice but to follow,” Lutnick said, according to Bloomberg.

Kim Yong-beom, the presidential chief of staff for policy, however, addressed planned expansions of local memory semiconductor fabrication plants in a Facebook post on Saturday.

“Expanding Korea’s semiconductor fabrication capacity is a national project,” he wrote.

“Production capacity is the new source of national strength. The strategy Korea needs is to prevent any supply gap that would allow competitors to grow in the first place.”

Although Kim did not directly mention Lutnick, his emphasis on expanding domestic production capacity has been interpreted as a contrasting message.

Samsung Electronics is building a semiconductor plant in Taylor, Texas, and SK hynix is pursuing an advanced chip packaging facility in Indiana. If Washington pushes for additional investment, companies could face greater financial pressure as they also move forward with expanding domestic fabrication plants.

Some expressed concern that while U.S.-bound investment struggles to gain momentum, Korea is advancing domestic investments worth a cumulative 1.6 quadrillion won ($1.07 trillion), which some fear could generate further frustration in Washington.

BY YOON JI-WON [[email protected]]