Category: Korea-Business

After 13 years since the sale of KEB happened it appears the Lone Star saga may finally be over:

An international arbitration body for investor–state dispute settlement has ruled in favor of South Korea in its challenge to the award for private equity fund Lone Star over its 2012 sale of a local bank, Prime Minister Kim Min-seok said Tuesday.

The International Center for Settlement of Investment Disputes (ICSID)’s annulment committee has nullified the earlier decision ordering South Korea to pay Lone Star US$216.5 million in compensation plus interest, Kim said in a briefing.

“The government’s compensation liability, which was roughly 400 billion won based on the current exchange rate, has been retroactively extinguished,” Kim said. “I believe that, thanks to our people’s support, the country’s fortune is moving in a positive direction.” 

Under the latest ruling, Lone Star is required to pay South Korea’s legal costs incurred during the proceedings — about 7.3 billion won (US$4.98 million) — within 30 days, Kim added.

South Korea had appealed the ICSID’s 2022 ruling to pay the compensation to Lone Star, after the private equity fund filed a suit in 2012 claiming that the South Korean government interfered with the sale of Korea Exchange Bank (KEB), incurring $4.67 billion in losses.

The presidential office said it welcomes the ruling that has now “corrected the error.”

Yonhap

You can read more at the link, but basically Lone Star made a bunch of much money in Korea by selling the Korea Exchange Bank and then tried to take its profits outside the country.  Their sale of the KEB led to large protests which caused the government to try and stop the sale any way it can. This all happened back in 2012 and was just one of a handful of anti-U.S. issues activists were using to stoke anti-American sentiment in Korea at the time.

Here we go again with the Chinese government trying to economically bully the ROK in an effort to attack the US:

Hanwha Ocean’s five U.S. affiliates have come under Chinese government sanctions, following the Korean company’s alleged support for the U.S. government’s investigation into Chinese competitors and the resulting imposition of new port fees.

With the new fees taking effect Tuesday, China’s Ministry of Commerce said the same day that organizations and individuals within the country are banned from engaging in transactions, cooperation or any activities with Hanwha Shipping, Hanwha Philly Shipyard, Hanwha Ocean USA International, Hanwha Shipping Holdings or HS USA Holdings Corp.

Of the companies, Hanwha Philly Shipyard is a symbolic site of the shipbuilding cooperation between Korea and the U.S. President Lee Jae Myung visited the shipyard during his trip to the U.S. in August.

“Hanwha Ocean’s U.S. subsidiaries have helped and supported the U.S. government’s investigations, which endanger our country’s sovereignty, security and interests,” the Chinese ministry said in a release.

Korea Times

You can read more at the link.

South Korea was pretty much forced to cut a deal with the Trump administration after the Japanese completed a deal just a week prior. They basically got the same trade deal as the Japanese:

U.S. President Donald Trump said Wednesday that his administration has agreed to lower “reciprocal” tariffs on South Korea to 15 percent from the proposed 25 percent in return for massive investments and market opening, and hold a summit with President Lee Jae Myung at the White House in two weeks.

Trump announced the deal with South Korea in a social media post, shortly after Seoul’s Finance Minister Koo Yun-cheol and other top negotiators met him in an effort to finalize an agreement before Friday, when the steep blanket tariffs are set to take effect unless a deal is reached.

“We have agreed to a Tariff for South Korea of 15%. America will not be charged a Tariff,” he wrote on Truth Social.

Under what he called a “full and complete” trade deal, Trump said South Korea will give the United States US$350 billion for investments “owned and controlled by the United States, and selected by myself.”

He claimed South Korea has agreed that it will be “completely” open to trade with the U.S., and that it will accept American products, including cars, trucks and agricultural goods.

The deal also includes South Korea’s agreement to purchase $100 billion of U.S. liquefied natural gas or other energy products, and invest a large sum of money for Seoul’s investment purposes, Trump said.

“This sum will be announced within the next two weeks when the President of South Korea, Lee Jae Myung, comes to the White House for a Bilateral Meeting,” he said.

Yonhap

You can read more at the link.

Here is what the U.S. Commerce Secretary had to say in regards to South Korea after Japan signed a new trade deal with the U.S.:

U.S. Commerce Secretary Howard Lutnick said Thursday that he could hear “expletives” out of South Korea after Japan reached a trade deal with U.S. President Donald Trump’s administration earlier this week.

Lutnick made the remarks, apparently suggesting that the tariff deal between the United States and Japan might have created a sense of urgency for South Korea, which seeks to reach a deal to avoid or lower the Trump administration’s 25 percent “reciprocal” tariff set to kick in on Aug. 1.

“I could hear the expletives out of Korea when they read the Japanese deal because the Koreans and the Japanese … they stare at each other,” he said in a CNBC interview.

“So you can imagine what they were thinking when they saw that Japan made that deal … They were like, ‘Oh man!,” he added, underscoring that Koreans “very much” want to make a deal.

Yonhap

You can read more at the link.

With the recent trade deal between the U.S. and Japan being agreed upon, this is now putting pressure on the ROK to get their own trade deal done before the August 1st deadline set by the Trump administration:

 South Korea will take into account details of a recent trade deal reached between the United States and Japan in a bid to use it as a possible reference for Seoul’s trade negotiations with Washington, the presidential office said Wednesday.

U.S. President Donald Trump said Tuesday (local time) that Washington had reached an agreement with Japan to cut proposed reciprocal tariffs on Japanese goods from 25 percent to 15 percent, adding the deal also includes Tokyo’s $550 billion investment pledge.

South Korea is also seeking to reduce 25 percent reciprocal U.S. tariffs, as well as sectoral tariffs on autos, steel and aluminum, through a comprehensive trade proposal ahead of the Aug. 1 deadline set by the Trump administration.

Yonhap

You can read more at the link, but it seems like the ROK will likely sign a deal with at least a 15% tariff rate so their imports remain competitive against Japan.

I guess Korean consumers are just not into Canadian coffee:

Canadian coffee brand Tim Hortons, operated in Korea by BKR, closed its Cheongna location in Incheon on Sunday, according to industry sources on Friday.

This marks the first closure of a directly operated store since the brand entered Korea, coming just over a year after the location opened in April 2024.

Industry experts attribute the decision to multiple factors, including declining profitability and the fierce competition within the saturated Korean coffee market.

Korea Herald

You can read more at the link.

I think Philadelphia has such a bad reputation that skilled workers may be hesitant to move there. This means Hanwha may have to offer large pay options to attract additional workers:

Hanwha Ocean’s recent invitation of domestic securities analysts to its Philly Shipyard has sparked both optimism and skepticism over the Korean shipbuilder’s efforts to revive the money-losing facility in Philadelphia.

While analysts anticipate Hanwha will benefit from a surge in orders driven by U.S. President Donald Trump’s push to counter China’s maritime rise by bolstering the American shipbuilding sector, they also questioned whether it will be feasible to secure enough labor in one of the world’s highest-paying countries.

Shinyoung Securities analyst Eom Kyung-ah pointed out that securing the workforce will be key for Hanwha to meet its goal of increasing Philly Shipyard’s revenue to $4 billion by 2035 from $368 million in 2024 by expanding annual capacity to up to 10 vessels from the current 1 to 1.5.

Korea Times

You can read more at the link.

President Trump’s tariffs are definitely contributing to this, but exports across the board are down for South Korea, not just to the U.S.:

South Korea’s exports plunged nearly 24 percent in the first 10 days of May, signaling that the US Trump administration’s tariffs are beginning to take a toll on the trade-dependent economy.

Outbound shipments totaled $12.8 billion during the May 1-10 period, down 23.8 percent from a year earlier, according to preliminary data from the Korea Customs Service released Monday.

Factoring in fewer workdays — five days during the period this year compared to 6.5 days in 2024 — average daily exports fell by just 1 percent, the agency added.

Shipments to China and the US — Korea’s two largest export markets — fell 20.1 percent and 30.4 percent, respectively. Exports to Vietnam declined 14.5 percent, while those to the European Union plunged 38.1 percent. Among the top five destinations, only Taiwan posted growth, with its shipments jumping 14.2 percent.

Korea Herald

You can read more at the link.

I guess we will see if this trip to Korea by Trump Jr. will lead to any breakthroughs in trade negotiations with the U.S.:

Donald Trump Jr., the eldest son of US President Donald Trump, arrived in Seoul on Tuesday for a meeting with around 20 business leaders from South Korean conglomerates, industry sources said.

The two-day trip by Trump Jr., his first to South Korea since his father’s inauguration in January, comes at the invitation of Shinsegae Group Chairman Chung Yong-jin.

Per sources, Trump Jr. arrived at Gimpo International Airport, western Seoul, in his private jet at around 6:25 p.m. Tuesday. It had been scheduled to touch down at 4:45 p.m. but there had been a slight delay before the departure.

Wearing a black cap and a long-sleeve shirt, Trump Jr. left the airport without speaking to the dozens of waiting South Korean reporters.

South Korean business circles asked Chung to facilitate Trump Jr.’s visit as a way to establish contact with the Trump administration, according to the sources.

Korea Herald

You can read more at the link.