The significance of US-Korea economic ties was highlighted dramatically last week. Korean representative president Han Duck So was among the initial global leaders to initiate a call with President Trump to commence discussions on trade innovation and avert unexpected new tariffs from the US.
In spite of the political upheaval in both nations, the US is striving to reshape international trade frameworks, while South Korea’s President was ousted earlier this month. Nonetheless, the economic connections between the US and South Korea are robust and poised for expansion. This lasting alliance is bolstered by multi-billion dollar investments in Korean firms, job creation across various fields, and US funding in South Korea.
Korean enterprises have long played a crucial role in the US economy. Notably, Hyundai Motor Group’s Hybrid and Electric Vehicle Manufacturing Plant in Georgia announced in May 2022, encompasses an investment exceeding $12.6 billion, generating 12,000 direct long-term jobs.
Moreover, Hyundai made a momentous choice in March to allocate $5.8 billion for steel production facilities in Louisiana, creating 5,400 jobs directly and indirectly, thereby establishing a fully integrated supply chain for manufacturing in the US.
Other major Korean entities such as Samsung, LG Electronics, and SK Group have also invested billions into US manufacturing and innovation. For instance, Samsung Electronics’ commitment of over $17 billion in semiconductor manufacturing facilities in Texas will generate thousands of well-paying jobs.
Like Samsung and Hyundai Motors, the Korean CJ Group comprises a conglomerate with several subsidiaries. Investment from the US is diversifying across various sectors and states.
CJ enm The entertainment marketing affiliate operates out of Los Angeles, while CJ Logistics is based in Illinois. CJ Bio is situated in Iowa.
CJ’s Schwan’s Co. is located in Minnesota and has frozen pizza operations in Kansas along with a billion-dollar Asian food facility in South Dakota. CJ Foodville oversees over 150 Tous Les Jours bakeries nationwide and has invested more than $47 million in new bakery and food processing facilities in Georgia.
In total, CJ has made an investment of $6 billion in US operations, providing employment for approximately 15,000 individuals.
These investments are part of a larger trend reflecting the significant role Korean companies play in the US economy.
The American Institute of Economic Research underscores the investments of Korean firms amounting to $114 billion in the US over the last three years.
Despite the political climate in both nations, there remains an opportunity for Korean firms to broaden their manufacturing investments within the US.
Korea ranks as the second-largest shipbuilder globally after China. Last year, Hanwha System and Hanwha Sea in Korea acquired the esteemed Philadelphia Shipyards for $100 million, a strategic move aimed at establishing a beachhead in the US which not only invigorated the US shipbuilding sector but also garnered public commendation from President Trump for Korean shipbuilding expertise.
The US-Korea business relationship is reciprocal, as exemplified by the shipbuilding industry.
The “Ships Initiative” seeks to bolster South Korea’s manufacturing investment in the US, with the South Korean Navy Industrial Base requiring ship initiatives in collaboration with its local shipbuilders, leading to ongoing congressional appeals for shipbuilding measures modeled after the effective chips law to enhance capabilities and create new local jobs.
Though South Korea’s investment in the US surpasses US investments in Korea, American companies also invest and operate there. Alongside the longtime operations of General Motors, Ford, and 3M in Korea, US capital in the digital and e-commerce space is becoming increasingly prominent. In total, Amazon Web Services, Coupang, and Netflix are projected to invest over $10 billion in South Korea in the upcoming years.
Korean society, under my presidency, has adapted its programming in the business and economics domains to respond to this emerging economic landscape: the increase in bilateral investment.
In this time of uncertainty for both Washington and Seoul, the pace and nature of occurrences are astonishing, unpredictable, and occasionally concerning. Nevertheless, the US-Korea economic partnership is deeply ingrained in both nations, poised not only to weather the challenges but also to venture into new sectors.
Thomas Byrne President and CEO of Korean Society. Previously, he served as Moody’s Investor Services Sovereign Risk Manager for Asia Pacific.
