More than a year after South Korea agreed to invest $350 billion in the United States, concerns are growing within the Trump administration over the slow pace of this investment, according to a report by the Financial Times on September 9, citing multiple sources.
One U.S. source warned that South Korea needs to "hurry up" or risk inciting President Trump's anger. Another source noted that Trump's criticism of South Korea for not cooperating in the U.S. war against Iran last month was also rooted in frustrations over the investment delays.
Jennifer Lee, a partner at the Washington-based consulting firm Asia Group, stated, "There has been significant accumulation of dissatisfaction within the U.S. government," particularly in comparison to Japan, which has made a series of investment announcements.
Last year, on July 31, the U.S. and South Korea agreed to lower mutual tariffs from 25% to 15%, with South Korea committing to invest $350 billion, including $150 billion in shipbuilding and $200 billion in key industries.
In contrast, Japan promised a $550 billion investment in the U.S. in July, following its own tariff reduction. Japan has since accelerated its investment plans, announcing specific projects such as a gas power plant in Ohio and small modular reactors in Tennessee and Alabama.
However, South Korea has yet to announce any significant investment projects, leading to increasing dissatisfaction from the U.S. Reports indicated that a Texas gas power plant was selected as the first investment project, but the presidential office has not confirmed details regarding the investment location, announcement timing, or initial funding amounts.
President Yoon Suk Yeol previously stated in November that investments would only be made in commercially viable projects. Professor Min Jeong-hoon of the Korea National Diplomatic Academy remarked, "Companies will not invest if there is no business viability. South Korea has to be cautious," adding that while Trump desires quick results, the positions of both sides differ.
Additionally, the U.S. Immigration and Customs Enforcement's (ICE) raid on the Hyundai Motor and LG Energy Solution battery plant in Georgia last September has also contributed to hesitance among South Korean companies regarding U.S. investments. President Yoon expressed concern that this incident could make South Korean firms "very hesitant" to invest in the U.S.
Jennifer Lee noted that there is a "substantial gap" in the interpretation of the agreement between the two governments, with the U.S. seeking greater influence over the investment and selection process for individual projects. The U.S. is also pressuring Samsung Electronics and SK Hynix regarding their investments in advanced memory production in the U.S., a sensitive issue for South Korea given its strategic importance.
On the other hand, shipbuilding is seen as an area where South Korea can leverage its negotiating power. While the U.S. accounts for only 0.2% of the global shipping market, South Korea is the world's second-largest shipbuilding nation after China. Trump's plan to revitalize the U.S. shipbuilding industry aligns with South Korea's "Make American Shipbuilding Great Again" initiative, which aims to integrate South Korean technology and expertise into the U.S. shipbuilding sector.
Some analysts argue that South Korea's delay is worsening its situation. With low approval ratings ahead of the November midterm elections, Trump may be seeking a "trophy" to present to Americans, and the delay in South Korean investments is fueling dissatisfaction.
Troy Stangarone, senior director at the Korea Economic Institute, emphasized the urgency for South Korea to announce initial investment projects, warning that the longer the delay, the greater the risk of being perceived as avoiding commitments to the Trump administration. He also suggested that Trump's recent mention of South Korea's deployment to the Strait of Hormuz could be aimed at promoting U.S. investment, although actual deployment may not resolve investment issues.
* This article has been translated by AI.
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