"Block the Tariff Bomb" Government Sends SOS to Business Sector... All-Out Public-Private Effort on Trade Front

As the "2+2 High-Level Diplomatic and Economic Dialogue" between South Korea and the United States was abruptly canceled without prior notice, both the government and the business sector have effectively shifted to an emergency response mode. The presidential office has significantly increased direct contact with the heads of major conglomerates, while large corporations are mobilizing all available resources, including departments for external cooperation and government relations, as well as local networks and lobbying channels in the United States. Some companies are even reportedly excluding U.S. nationals from trade response meetings. With the negotiation phase rapidly spiraling out of control, there is a strong sense of crisis that both the government and businesses must deploy every possible means at their disposal.

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According to the business community on the 25th, President Lee Jaemyung has recently been holding a series of meetings with the heads of major conglomerates. President Lee had a dinner with Kim Dongkwan, Vice Chairman of Hanwha Group, on the 21st, and with Chey Taewon, Chairman of SK Group, on the 22nd. It is also reported that he met with Lee Jaeyong, Chairman of Samsung Electronics, on the 24th. Previously, he had met with Chung Euisun, Chairman of Hyundai Motor Group, and Koo Kwangmo, Chairman of LG Group.

This series of meetings is interpreted as an effort to review private sector achievements?such as investment and employment records?to be proposed to the U.S. side during trade negotiations, and to coordinate response strategies for each company. The government is expected to officially deliver domestic companies' investment plans in the U.S. to the U.S. government as early as next week. The presidential office has recently contacted major groups such as Samsung, SK, Hyundai Motor, and LG to confirm the scale of available local investments, and the total investment amount tallied so far is reportedly close to $100 billion.

The business sector, having effectively received a "request for support" from the government, is also moving swiftly. A significant number of external cooperation and policy cooperation personnel from major groups such as Samsung Electronics, Hyundai Motor, LG, and SK have already been dispatched to Washington, and they are simultaneously responding to congressional and administration channels in line with government officials' visits to the U.S. It is also reported that there is ongoing contact with lawmakers representing districts where each company's U.S. factories are located.

A representative from a major conglomerate said, "There is an internal consensus to mobilize all overseas government relations organizations in preparation for a possible deterioration in the trade negotiation situation," adding, "In fact, most government relations personnel have already been dispatched to Washington." Another company official explained, "While it is difficult for companies to take the lead in negotiations, we are monitoring the reactions and internal atmosphere of the White House and Congress and sharing this information with the government."

However, there are also constraints on local responses. Companies have actively hired U.S. citizens to strengthen their government relations capabilities in the U.S., but these individuals cannot participate in intergovernmental trade negotiations. The U.S. can hold its citizens legally accountable overseas if national interests are compromised. Therefore, even if they belong to foreign companies, it is difficult for U.S. nationals to be involved in matters contrary to U.S. government policy. From South Korea's perspective as well, it is important to avoid unnecessary legal or diplomatic misunderstandings during negotiations with the U.S.

Despite these institutional constraints and practical difficulties, companies have mobilized all available resources and have effectively switched to an emergency response mode. Since the outcome of these negotiations is directly linked to their business base in the U.S., it is being recognized not simply as a matter of cooperation but as a matter of survival. A business sector official said, "We are aware that it is difficult to directly influence policy decisions, but right now, there is a mood to mobilize every available network and try everything we can."

President Lee Jae-myung is taking a commemorative photo with participants of the meeting with six economic organizations and business leaders at the Yongsan Presidential Office building in Seoul on the 13th of last month. From the left: Choi Jin-sik, Chairman of the Korea Federation of Medium-sized Enterprises; Koo Kwang-mo, Chairman of LG Group; Shin Dong-bin, Chairman of Lotte Group; Chung Eui-sun, Chairman of Hyundai Motor Group; Lee Jae-yong, Chairman of Samsung Electronics; President Lee; Choi Tae-won, Chairman of SK Group and Chairman of the Korea Chamber of Commerce and Industry; Sohn Kyung-shik, Chairman of the Korea Employers Federation; Ryu Jin, Chairman of the Korea Economic Association; Yoon Jin-sik, Chairman of the Korea International Trade Association; Kim Ki-moon, Chairman of the Korea Federation of Small and Medium Business. Presidential Office

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Within and outside the industry, there is analysis that President Donald Trump is likely to conclude negotiations early with allied countries such as Japan and South Korea, and then move on to exert full-scale pressure on the European Union (EU) and China. As a result, there is a growing perception that South Korea can no longer remain a bystander. In fact, in negotiations with Japan, the U.S. applied tariff reductions on automobiles without separate quotas, and Japan reportedly presented an investment plan totaling $550 billion.

Kim Changbeom, Executive Vice Chairman of the Federation of Korean Industries, said, "We must overcome a steep uphill section within the less than ten days remaining before the negotiation deadline," adding, "If negotiations with the EU are concluded following Japan, South Korea will be left alone, so it is crucial to reach a broad agreement."

Shin Wonkyu, Invited Research Fellow at the Federation of Korean Industries, also stated, "South Korea should set a realistic negotiation goal of achieving a 15% tariff reduction, as secured by Japan," and added, "If we fall short of Japan in terms of investment scale or product diversity, the negotiations themselves will not be easy."

In fact, experts believe that, as in Japan's case, item-by-item tax reduction negotiations and the formation of funds can serve as realistic negotiation cards. Shin pointed out, "It is necessary to persuade the U.S. within the framework of economic security cooperation, through tangible cooperation proposals such as participation in shipbuilding and liquefied natural gas (LNG) projects, as well as exchanges in steel, parts, equipment, and skilled personnel."

The industry expects that shipbuilding could be South Korea's "hidden card," but also notes that institutional constraints coexist. The U.S. has reportedly requested investment, technology transfer, and personnel dispatch from allied countries to revitalize its shipbuilding industry, but has yet to select a concrete partner. An industry official said, "In reality, only South Korea and Japan are capable of fulfilling such a role," adding, "If the government, rather than companies, reaches out at the national level, the U.S. would have no reason to refuse."

The business sector is preparing to mobilize all available negotiation assets beyond shipbuilding. Key examples include investments in core mineral refining and supply chains, U.S. market entry by semiconductor and secondary battery ecosystem companies, cooperation in space and defense industries, and expansion of partnerships in advanced process equipment and material technologies. In addition, joint development of Korean-style artificial intelligence (AI) semiconductors (PIM), joint venture entry by SMEs and startups, linked investments in data centers and power infrastructure, and joint development and supply cooperation in the health and bio sectors are also considered major cards.

However, some warn that excessive concessions or merely formal investment plans could backfire. It is pointed out that the overall structure of the negotiations must be closely examined for practical benefits and balance, and that if concessions are made without specific countermeasures, it could set an unfavorable precedent for future negotiations. In fact, the South Korean government, together with domestic companies, is reviewing U.S. local investment plans exceeding $100 billion (about 137 trillion won), but the U.S. side is reportedly demanding investment commitments of a much larger scale. Bloomberg News reported on the 24th (local time), citing multiple negotiation sources, that South Korea is considering the creation of an investment fund to secure U.S. tariff reductions, and that U.S. Secretary of Commerce Howard Lutnick requested a $400 billion (about 547 trillion won) fund from Yeo Hankoo, South Korea's Trade Minister. This is similar in scale to the $550 billion financial support package Japan promised to the U.S.

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