The U.S. and South Korea Must Continue Building on Their Strong Relationship | Opinion

This year marks the 70th anniversary of the alliance between the United States and South Korea. Forged as a military relationship during the Korean War, it was formalized by treaty in 1953 after an armistice ended hostilities between the two Koreas.
Since then, the U.S.-South Korea military alliance has grown into a comprehensive strategic and economic partnership and is now the linchpin to security and stability in the Indo-Pacific region. In the 21st century, the economic relationship is powered by the Korea-U.S. Free Trade Agreement, which has been in force since 2012.
Strengthening economic ties between South Korea and the U.S. will be on the agenda when President Joseph Biden hosts South Korean President Yoon Suk-yeol in a state visit to the White House next month.
At the 2021 summit between President Biden and then-South Korean President Moon Jae-in, the two nations reaffirmed their commitment to shared economic growth. Importantly, they agreed to increase supply chain resiliency, including in priority sectors such as semiconductors, eco-friendly EV batteries, legacy chips for automobiles, and to support semiconductor manufacturing in both countries through the promotion of increased mutual investments.
This bold vision builds on a strong base. The U.S. and South Korea have invested heavily in each other’s countries. According to the U.S. Bureau of Economic Analysis’ (BEA) most current data, in 2020, South Korean-owned companies’ assets in the U.S. amounted to nearly $174 billion, a total that has more than tripled from $48 billion in 2010. Further, BEA reports these companies employed 83,800 Americans and performed $1.8 billion in research and development. In South Korea, the asset value of U.S.-owned affiliates totaled $182 billion, while U.S. companies employed 120,400 workers and performed $1 billion in research and development.
For Americans, numerous South Korean brands are household names and major employers. Hyundai Motor Group and Kia Motors, Samsung, LG and CJ Group all produce goods and services Americans use and enjoy and make large, ongoing investments in America. Technology manufacturing is at the forefront of these major outlays—the production of EVs and batteries, semiconductor chips and solar panels, to name a few. All of these products will enhance our nation’s security.
Hyundai Motor Group broke ground on its $5.5 billion EV and battery plant in Georgia in October of last year, which will create 8,100 direct jobs. Hyundai Motor has already created 14,000 jobs in and around its plant in Alabama and an equal number at its affiliated Kia plant in Georgia.
South Korea’s battery maker SK Innovation and Ford are collaborating to build two EV battery factories, with a total investment of $11.4 billion, in Kentucky and Tennessee. So vital is EV battery technology to U.S. security, and so trustworthy are South Korean companies, the Department of Energy gave Ford and LG a $2.5 billion loan to build battery plants in the U.S.
South Korean soldiers salute in front of a huge national flag during the media day for the 73rd Armed Forces Day on Sept. 30, 2021, in Pohang, South Korea. Lee Jin-Man – Pool/Getty Images
“The role of the South Korea’s battery manufacturers in the United States cannot be minimized,” said Troy Stangarone, Senior Director at the Korea Economic Institute, a Washington think tank. “For U.S. auto manufacturers to meet their EV (electric vehicle) production targets, it will depend on the extensive and growing investment by South Korean firms in U.S. domestic EV battery production. In many respects, the future of electric vehicles in the United States depends on how well U.S. and Korean companies can work together, along with the policies put in place at the state and federal levels.”
In December 2022, Samsung announced plans to build a $17 billion next-generation semiconductor factory in Texas. It is projected that Samsung’s initial investment will generate 2,000 direct jobs, and if all proceeds smoothly, Samsung could increase its investment in the region by more than 10 times—the company envisions 11 chip-making plants in Texas.
Last month, the solar panel manufacturer Hanwha Q CELLS announced a $2.5 billion investment to expand its existing solar manufacturing facility in Georgia and construct a new factory near Atlanta. Demonstrating its commitment to American energy security, Hanwha’s move represents the largest single investment in solar manufacturing in the U.S. and brings 2,500 jobs to Georgia.
In addition to traditional industries where economic cooperation flourished, such as semiconductors, automobiles, and energy and defense, South Korean lifestyle and culture companies are a growing presence in the U.S. CJ, for example, a well-known food and culture brand in South Korea, is expanding its investments and raising its profile in the U.S.
CJ has a $400 million presence in the American heartland with its CJ BIO plant in Fort Dodge, Iowa. This facility makes amino acids—critical elements of U.S. food security and present in most food. CJ built on its success on the U.S. bio sector with investments in its logistics and food affiliates. Bibigo dumplings, star of the CJ Foods lineup, became a sponsor of the Los Angeles Lakers in 2021. CJ’s entertainment arm, CJ ENM, hosts the biggest annual celebration of Korean culture—Los Angeles’s KCON. Overall, CJ has invested more than $3 billion into the American economy and has nearly 13,000 employees in the U.S.
As changes in technology and geopolitics challenge the global order, the U.S. must buttress its supply chain networks for all its essential resources, commodities, and technologies. It is more important than ever that Americans depend on their trusted allies as secure and reliable suppliers of necessary goods and services. South Korea supplies many of America’s essential needs and has proven itself as reliable partner in a challenging region of the world.
Washington’s trade and finance policies should encourage the expansion of U.S.-South Korea business relationships, invite more South Korean businesses to invest in America, and promote American business expansion in South Korea. The people of both countries will benefit.
Gregory Tosi is a former congressional aide and Washington, D.C.-based attorney who specializes in international trade in developing countries.
The views expressed in this article are the writer’s own.