The US-South Korea economic relationship holds too much promise to be targeted by Seoul’s regulatory agencies.

South Korea’s technology relationship with the United States is a tale of two trends, and this past week they collided. On the one hand, the partnership and mutual dependence are deeper than ever: US and South Korean firms are pouring capital and know-how into each other’s markets, anchoring the technology supply chains that drive artificial intelligence (AI) and economic growth in both countries. On the other hand, deep trade friction over digital issues threatens the very trust needed for the bilateral relationship to thrive. 

Despite the South Korean government’s assertions that its policies and enforcement are non-discriminatory, mounting evidence points to persistent protectionist barriers and a regulatory enforcement record that falls hardest on US technology firms. Seoul must now decide which trend will define the relationship. Washington has made clear, most recently with President Donald Trump’s tariff threat over the European Union’s fine against Google and other US tech companies, that it will no longer stand by while its companies are singled out.

The partnership trend is real and deep. The synergy was on full display at Korean President Lee Jae-myung’s July 24 AI summit in San Francisco, where Samsung and SK Group announced AI chip and infrastructure partnerships with Nvidia, Broadcom, and other US firms valued at $950 billion. Earlier that week, Korea’s Minister for Trade, Industry, and Energy, Kim Jung-kwan, met with US Commerce Secretary Howard Lutnick in Philadelphia to advance US-Korea shipbuilding ties, adding to major Korean investments in US manufacturing. 

In Korea, AWS is investing 7.85 trillion won ($5.6 billion) in cloud infrastructure through 2027, while Corning is directing $1.5 billion toward bendable glass production in Asan. Korean memory leadership underpins the AI buildout on both sides of the Pacific, and the two governments cooperate on export controls and technology security. Hundreds of thousands of Korean creators, developers, and businesses reach global audiences and make a living using American platforms. This is what an allied economic relationship should look like. 

The trade friction trend is accelerating in the opposite direction just as quickly. On July 1, the House Judiciary Committee’s antitrust subcommittee released “Closed for Competition: South Korea’s Discriminatory Attacks on American-owned Businesses,” which consolidates a set of concerns that have accumulated across trade, competition, and digital regulation over the past decade. Its central finding is that enforcement by the Korea Fair Trade Commission (KFTC) falls disproportionately on American firms, and that the pattern is escalating. 

While the Korean government has tried to rebut the report’s claims, the KFTC’s own record shows that American companies accounted for seven of the 10 largest abuse-of-dominance fines, making up 95.5 percent of total fines on the list, compared with the 4.5 percent imposed on Korean firms. 

Recent regulatory actions deepen these concerns. The KFTC is reportedly moving toward a potential $550 million fine against Google, and it has publicly proposed penalties of up to $34 million against Analog Devices, a US semiconductor firm, before the commission has even ruled. The KFTC will argue that large fines simply reflect large market positions. But market share alone fails to explain which cases get opened, how they’re publicized, or how many Korean regulatory agencies then pile on, often to the benefit of local competitors. 

The Coupang case shows how far the pattern extends. More than 10 South Korean agencies initiated dozens of investigations into Coupang. On June 11, privacy regulators fined Coupang $409 million, the largest data-related penalty in Korean history. On July 9, Korean tax authorities levied a special tax assessment of about $213 million on Coupang.  

Washington no longer treats this regulatory targeting of US firms as incidental. On July 24, President Trump announced a Section 301 investigation into the EU’s digital fines after Brussels imposed another billion-dollar penalty on Google, writing that the United States is not a “PIGGYBANK” for Europe and promising to reverse the penalties and impose substantial tariffs. Vice President JD Vance warned Korea in January about targeting American technology firms. Congresswoman Carol Miller’s (R-WV) March letter to Trade Representative Jamiesion Greer identified Korean public-sector cloud policy as a structural barrier. 

Last September, US Federal Trade Commission Chairman Andrew Ferguson warned against ex-ante competition regulation and discriminatory treatment of US firms abroad, including in Korea, during a speech in Seoul. The administration’s February 2025 policy statement committed to defending American companies against foreign rules that burden US firms more than domestic ones. After the EU, Korea risks becoming the next case. 

Korea’s economic success in advanced semiconductors, memory, and consumer electronics has benefited from deep integration into US-led global supply chains and consumer markets, as well as technology partnerships with American firms worth trillions of dollars. At the core of that success sits trust built over decades, and that trust is what Korea’s decision now puts at stake.  

The question is whether Korea addresses these regulatory challenges in ongoing US-Korea trade negotiations or lets them accumulate as friction that spreads into the broader relationship. Last week’s negotiations and Trump’s response to the EU’s fine make Korea’s choice immediate. Reform deepens an alliance and technology partnership that has served both countries well. Inaction invites a fight that puts far more than technology at risk, for both economies. The collision leaves room for only one trend. Korea should choose the trend on which its success was built. 

About the Author: Nigel Cory

Nigel Cory is a director of trade and technology at Crowell Global Advisors, a consulting firm, and a non-resident fellow at the National Bureau of Asian Research, where he has written extensively on US-Korea technology and trade issues. Nigel has provided in-person testimony and written submissions. He has published reports and op-eds relating to these issues in the United States, the European Union, Australia, China, India, and New Zealand, among other countries and regions. He has completed research projects for international bodies such as the Asia Pacific Economic Cooperation and the World Trade Organization.

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