As the South Korean private economic delegation makes its first official visit to the United States following the election of Donald Trump as president, attention is focused on what negotiation cards they will present to the Trump administration, which is imposing indiscriminate tariffs. South Korea is expected to discuss expanding imports of American energy, such as oil and gas, and increasing investments in the U.S.
The Korea Chamber of Commerce and Industry (KORCHAM) announced that the South Korean economic delegation will begin its 'U.S.-Korea trade outreach' activities in Washington, D.C., on the 19th and 20th (local time). This economic delegation includes Chey Tae-won, chairman of KORCHAM and SK Group, as well as representatives from key industries in U.S.-Korea economic cooperation such as steel, shipbuilding, energy, and platforms, centering on major export items to the U.S. like automobiles and semiconductors.
This visit is largely aimed at conveying South Korea's concerns over the Trump administration's tariff policy, which could negatively impact exports to the U.S., and reviewing ways for the two countries to mutually benefit. President Trump, advocating for 'America first,' has intensified the trade war by using high tariffs to pressure trading partners and push for a resolution to trade imbalances since taking office last month.
The South Korean economic delegation is expected to express its intent to actively expand imports of American energy such as oil and gas. Aligning with President Trump's policy, which promises to expand oil drilling activities in the U.S., South Korea plans to bolster its position as a reliable export partner by increasing imports of American energy.
During Trump's first term, South Korea also increased imports of American energy. The amount of imported liquefied natural gas (LNG) from the U.S. was only 30,000 tons in 2016, but surged to 1.96 million tons (5% share) in 2017, 4.66 million tons (11%) in 2018, 5.23 million tons (13%) in 2019, and 5.76 million tons (14%) in 2020, with imports peaking at 8.48 million tons (18%) in 2021 before declining to 5.76 million tons (12%) in 2022 and 5.11 million tons (12%) in 2023.
In the case of crude oil, the U.S. share reached 14% in 2023, significantly lower than the Middle Eastern oil share of 72%. Minister of Trade, Industry and Energy Ahn Duk-geun noted in an interview last month, "Given the need to manage trade balances with the U.S., it is necessary to expand imports of American energy, so corporations want to broaden their options from a business strategy perspective while the Ministry looks to increase policy leeway."
The automobile industry is increasing domestic production and considering facility investments in parts to respond to the import tariff on cars announced by the Trump administration. According to the Ministry of Trade, Industry and Energy and the Korea International Trade Association, among last year's automobile exports worth $70.789 billion (about 102 trillion won), exports to the U.S. accounted for $34.744 billion (about 50 trillion won), which is 49.1%. Although South Korea has exported cars without tariffs under the Korea-U.S. Free Trade Agreement (FTA), President Trump has stated that there will be no exceptions for allies or FTA signatories.
Hyundai Motor Group operates Hyundai's Alabama plant, Kia's Georgia plant, and the testing operations of the 'Hyundai Motor Group Metaplant America' (HMGMA) in Georgia, which commenced in the second half of last year. The group plans to increase the total annual production capacity of the three plants to 1.18 million units, which is about 70% of last year's sales volume of Hyundai and Kia in the U.S. (approximately 1.7 million units), thus increasing the share of local production.
In the steel sector, where tariffs are announced, Hyundai Steel and POSCO are considering establishing factories in the U.S. They plan to support the automotive industry by setting up electric furnaces on-site.
There is significant cooperation potential with the U.S. in the next-generation nuclear power sector, including small modular reactors (SMR). Companies like Doosan Enerbility and DL E&C have already formed close relationships with leading SMR companies in the U.S., such as Nuscale Power, TerraPower, and X-Energy, by signing equipment supply agreements.
The delegation is expected to discuss ways to expand cooperation with the U.S. in areas such as shipbuilding and semiconductors, which would be mutually beneficial.
KORCHAM plans to emphasize that South Korea is a model country and exemplary corporation for investing in the U.S. by actively practicing the 'Buy America' promise during Trump's first term, noting, "We will reaffirm that we are a reliable partner for the U.S. in Trump's second term."