Korean Minister: Coupang Data Breach Won't Undermine US-South Korea Alliance

Kim Jung-kwan, the Minister of Trade, Industry and Energy, stated on August 6 that the recent data breach incident involving Coupang will not jeopardize the US-South Korea alliance. He emphasized that the alliance is not fragile enough to be shaken by such issues.

Speaking at the Kwanhun Forum held at the Korea Press Center in Seoul, Minister Kim responded to perceptions that the South Korean government's actions towards Coupang could be seen as discrimination against American companies. He questioned, "If the South Korean government were discriminating against Coupang simply because it is an American company, could it have grown at such a rapid pace?"

He highlighted that the core issue of the Coupang incident is the data breach, not the company's nationality. "The fact that personal information of 80% of South Korean adults was leaked and that this went unnoticed for months is the crux of the matter," he said. He added, "If 80% of American adults' information were leaked abroad without proper reporting or legal procedures, how would the United States respond? Most American politicians would agree with this perspective."

Minister Kim noted a difference in perspectives between US lawmakers and trade officials regarding the Coupang incident. He remarked, "When I meet with American politicians, I get the impression that they react quite sensitively to the Coupang issue. In contrast, officials from the Department of Commerce and the Office of the United States Trade Representative (USTR) have a much better understanding of the essence of the situation."

He pointed out that some in the US political sphere mistakenly view Coupang as a distribution network that could reduce the US trade deficit with South Korea. "Many American politicians believe that agricultural and livestock products from the US are imported into Korea through Coupang," he said, adding that it surprises them to learn that Korean consumers perceive Coupang as importing cheaper products from China rather than the US.

Minister Kim stated that the South Korean government is working to clarify misunderstandings and bridge the perception gap with the US through the Ministry of Foreign Affairs, the Ministry of Trade, and the South Korean Embassy in the US.

Regarding the additional tariffs related to the US Section 301 investigation, he expressed that efforts are being made to keep the total tariff rate below 15%, and there is a consensus among the trade authorities of both countries. Recently, the US classified South Korea, along with Japan and Switzerland, as a preferred group in the investigation results concerning the prohibition of imports of products made with forced labor. South Korean products will be subject to a total tariff rate of 12.5% if the existing most-favored-nation (MFN) tariff rate is lower than that.

However, if additional tariffs are imposed due to the investigation into overproduction, there is a possibility that the total could exceed the 15% agreed upon in last year's US-South Korea trade agreement. Minister Kim emphasized, "We will do our best to maintain the Section 301 tariffs, including measures related to overproduction, at the originally agreed level of 15%. The 15% itself is not the ultimate goal; rather, the aim is to secure a tariff level that is not disadvantageous compared to competing countries."

As for the timing of the investigation results announcement, he mentioned, "During discussions with the US at the end of July, I was informed that there were about 3 to 4 weeks remaining. I understand it is expected to be announced in August, but there is also a possibility it could be delayed beyond that."