Japan agreed to lower the tariff rate on U.S. exports from 25% to 15% and decided to participate in the Alaska liquefied natural gas (LNG) project. The United States had requested Korea and Japan to participate in the Alaska LNG development project. With Japan's participation in the LNG project confirmed, pressure for participation on Korea is expected to increase.
According to major foreign news outlets, including The New York Times (NYT), U.S. President Donald Trump said on the 22nd (local time) during a meeting with Republican members of Congress at the White House that "the Japanese government will begin the joint venture (JV) establishment contract for Alaska LNG exports." In this regard, a senior official from the Trump administration noted to Bloomberg that "the investment in the Alaska LNG project could come from the $550 billion (about 760 trillion won) investment fund that Japan disclosed during tariff negotiations with the United States."
In early March of this year, President Trump stated during a joint speech to the U.S. Congress that "many countries, including Korea and Japan, want to participate in the (Alaska) project. They want to invest trillions of dollars." At that time, the Korean and Japanese governments were hesitant to participate due to the unclear revenue potential of the Alaska LNG project.
The Alaska LNG project aims to transport natural gas extracted from the northern Alaska gas field approximately 1,300 kilometers through pipelines to the southern Nikiski area, where it will be liquefied and exported. The total project cost is estimated at about $44 billion, requiring the construction of pipelines and liquefaction plants. Due to high development costs and potential lawsuits from environmental groups, global corporations such as ExxonMobil and BP withdrew from the project in 2016, citing insufficient viability.
President Trump has continuously pressured Asian countries to invest in the Alaska LNG project, and the state-owned oil company of Taiwan, CPC Corporation, signed a letter of intent for LNG purchase and investment with the Alaska Gasline Development Corporation (AGDC) last March. In this context, Japan's formalization of its participation in the Alaska LNG project is expected to further increase pressure on Korea.
Minister of Trade, Industry and Energy Kim Jeong-kwan visited the United States for Korea-U.S. trade negotiations, reportedly with officials from the Ministry's gas industry division. Minister Kim is also expected to hold talks with U.S. Secretary of Energy Chris Wright. Before departing, Minister Kim said, "It is difficult to predict the direction of current U.S. tariff measures, but I will negotiate in a way that maximizes national interests under close intergovernmental cooperation. I will do my utmost to ensure that this opportunity can yield a positive sum result, where both countries benefit, in industrial and energy cooperation."
The '2+2 trade negotiations' between Korea and the United States, scheduled to be held in Washington, D.C. on the 24th and 25th, have been suddenly canceled. The trade negotiations were to include Korea's Deputy Prime Minister and Minister of Economy and Finance Ku Yoon-cheol, Minister of Trade, Industry and Energy Yeo Han-koo, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer.
An industry insider said, "It is even difficult to discuss whether participating in the Alaska LNG project would be beneficial. If talks progress along with tariffs, we may have to participate in the Alaska LNG project even reluctantly."