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The Complex Crisis of ROK-US Trade Friction: A Test of Alliance Strategy Management Triggered by the Coupang Discrimination Controversy and White House Pressure
Executive Summary
Executive Summary
The ROK-US trade friction surrounding the Coupang discrimination controversy, while superficially a regulatory dispute involving an individual company, is in reality a complex crisis where the US's digital trade strategy is being applied to allies without exception, manifesting directly in Korea. This crisis encompasses three overlapping dimensions: trade and economic security, alliance and security, and politics and diplomacy. Notably, the White House has explicitly targeted the current administration with pressure, and realistic concerns are emerging in diplomatic circles about the possibility of the US linking the Coupang issue to core security agendas such as nuclear-powered submarine construction and uranium enrichment talks. Consequently, this matter has been elevated to a test of the ROK-US alliance's strategic management capabilities. The most plausible scenario (with an approximately 55% probability) is a two-track management approach where the Coupang issue persists as a source of friction without short-term resolution. In this context, the Korean government's primary task is to transition from a declarative stance to a concrete action plan for 'Issue Compartmentalization'—actively preventing the issue from spilling over into security cooperation agendas while maintaining a principled stance on the legal justification of the Coupang investigation. To achieve this, the Korean government must simultaneously strengthen its diplomacy with the US Congress, strategically utilize the consultation channels for the implementation of the Joint Fact Sheet, and proactively build trust by enhancing the transparency of digital regulations. This balanced strategy aims to minimize alliance management costs without compromising regulatory sovereignty.
I. Issue Situation Analysis
ROK-US Trade Friction: The Coupang Discrimination Controversy and White House Pressure — Issue Situation Analysis
1. Background and Progression of the Issue
Coupang operates an e-commerce platform through its Korean subsidiary, but its parent company, Coupang Inc., is a US-based entity listed on the New York Stock Exchange (NYSE), giving it the legal character of an American company. This structural characteristic forms the core background of the current ROK-US trade friction. Following a large-scale personal data breach at Coupang in 2025, the Korean government initiated investigations and hearings in accordance with domestic law. However, Coupang claimed that the Korean government was targeting it with discriminatory actions during this process and began actively raising the issue with the US Congress and administration [3][8].
Coupang's lobbying efforts quickly resonated within US political circles. In February 2025, the US House Judiciary Committee summoned Harold Rogers, interim representative of Coupang Korea, to testify. In April of the same year, 54 Republican members of the House of Representatives sent a letter to Ambassador Kang Kyung-wha in Washington, urging an end to discrimination against American companies like Coupang [8]. As the Coupang issue gradually gained traction within the US Congress, it officially emerged as a ROK-US diplomatic issue on July 1, 2026, when the Republican members of the US House Judiciary Committee released an interim investigation report titled 'Blocking Competition: Korea's Discriminatory Attacks on American-Owned Companies' [3][5].
2. Current Situation (Latest Developments)
On July 2 (local time), the day after the release of the US House Judiciary Committee report, a White House official issued a statement to Korean media, directly asserting, "By any reasonable measure, Coupang is being targeted by the Lee Jae-myung administration." The statement warned, "The Trump administration will not tolerate unfair trade practices, including actions that restrict market access for American digital services" [1][8]. The issue has thus escalated from a congressional report to direct pressure from the executive branch.
In response, the Korean government issued counter-statements for two consecutive days. On July 2, Ministry of Foreign Affairs spokesperson Park Il expressed regret, stating that the report "unilaterally reflected only Coupang's claims" [7]. On July 3, National Security Advisor Wi Sung-lak held a press briefing, affirming that "all investigations into Coupang are being conducted non-discriminatorily in accordance with due process under domestic law" [1][6]. The National Intelligence Service also released a statement refuting the report's contents as factual [3][7], and the National Assembly Secretariat expressed regret that the US House report did not sufficiently reflect the constitutional authority and procedures of the Korean National Assembly [8].
Currently, the issue is likely to be discussed within the framework of inter-agency consultations for the implementation of the Joint Fact Sheet agreed upon by the ROK-US leaders last November. However, concerns are being raised in diplomatic circles that the US may use the Coupang issue as leverage to further delay nuclear talks related to the construction of nuclear-powered submarines and the enrichment and reprocessing of spent nuclear fuel [5][8]. In fact, the first ROK-US nuclear energy consultation meeting was held in Seoul last month, but the schedule for the second meeting, to be held in the US, is still under coordination and has not yet been confirmed [5].
3. Key Actors and Their Positions/Interests
Trump Administration (White House)has emerged as the most aggressive actor in this issue. The Trump administration's core trade policy is to ensure market access for American digital service companies, and it is leveraging the Coupang issue as leverage for trade pressure against Korea by framing it as a case of "unfair trade practices" [1][8]. This demonstrates the Trump administration's application of a transactional diplomacy that prioritizes economic interests even with allies.
Republican Members of the US House Judiciary Committeeplayed a role in drafting and releasing the interim report by actively accepting Coupang's claims. The report alleged that the Korean government engaged in a "harassment campaign" against Coupang, causing its market capitalization to plummet by over 40%, potentially leading to economic losses exceeding $500 billion for the US over the next decade [8]. It also included claims that South Korea's National Intelligence Service pressured Coupang employees regarding operations in China and attempted to criminally prosecute the interim CEO, a US citizen [3]. The report further claims that South Korea violated the trade agreement between the two heads of state specified in the ROK-US Joint Fact Sheet, suggesting an intent to escalate the Coupang issue into a larger trade dispute [5].
Coupang (Coupang Inc.)is the direct instigator of this incident. Coupang has actively lobbied the US Congress and administration, claiming that the Korean government's investigation was discriminatory and targeted. It is employing a strategy to secure protection from the US political establishment by utilizing its status as a US-based corporation, aligning with its interest in achieving favorable outcomes within the Korean regulatory environment [3][4].
Korean Government (Presidential Office, Ministry of Foreign Affairs, NIS)is responding defensively. The government consistently emphasizes that all investigations into Coupang have been conducted legally and non-discriminatorily under domestic law, refuting the US claims as solely based on Coupang's one-sided assertions [1][6][7]. Simultaneously, it is pursuing a strategy of 'isolation and separation' to prevent the issue from escalating into security cooperation agendas, such as nuclear-powered submarine cooperation. National Security Advisor Wi Sung-lak's statement, "We will strive to ensure this issue does not become excessively large and cause repercussions in other areas of ROK-US relations," clearly illustrates this approach [1][5].
Korean National Assembly and the Democratic Party of Koreastrongly oppose the US Congressional report. The Democratic Party of Korea criticized the report for distorting the Korean government's position based on Coupang's one-sided claims and unverified data [4]. The National Assembly Secretariat also expressed regret that the US House report did not sufficiently reflect the constitutional authority and operational procedures of the Korean National Assembly [8].
4. Summary of Key Issues
The key issues in this matter can be summarized into three main levels.
First, whether the Korean government's investigation of Coupang constitutes discriminatory and targeted action. The US side claims that the Korean government intentionally targeted and discriminated against a US-owned company, while the Korean government maintains that all investigations were conducted non-discriminatorily in accordance with domestic law [1][6][7]. A fundamental difference in perception regarding the facts exists between the two sides, and as long as this gap remains unbridged, the conflict is likely to persist.
Second, conflicting interpretations regarding the implementation of the ROK-US Joint Fact Sheet. The US side claims that Korea violated the trade agreement stipulated in the Joint Fact Sheet agreed upon by the leaders during their summit last year [5], while the Korean government counters that it is faithfully implementing the promises made in the Joint Fact Sheet [8]. This interpretive conflict is expected to become the most contentious point of debate in future inter-agency consultations.
Third, the possibility of linking trade friction to security cooperation. This is the strategic issue that requires the most attention in this matter. If the Coupang issue becomes linked to ROK-US nuclear cooperation agendas, such as the construction of nuclear-powered submarines, uranium enrichment, and spent nuclear fuel reprocessing, it could act as a complex challenge to overall alliance management beyond a simple trade dispute [5][8]. If the US adopts a transactional approach, linking economic leverage to security cooperation, this issue warrants the most serious monitoring as Korea could be exposed to structural vulnerabilities, facing pressure on both trade and security fronts simultaneously.
II. In-depth Issue Analysis
ROK-US Trade Friction: The Coupang Discrimination Controversy and White House Pressure — In-depth Issue Analysis
1. Analysis of the Root Causes of the Issue
The root cause of this ROK-US trade friction lies not in a simple corporate dispute, but in the structural tension that arises when a company dominated by US capital becomes subject to Korean legal regulations. Coupang has a dual corporate structure where its US-based parent company, Coupang Inc., operates in the domestic market through its Korean subsidiary. This structure grants Coupang a dual status: it is an entity subject to Korean domestic law within Korea, yet it can seek protection from the US political establishment as an 'American company.' Ultimately, the structural vulnerability where the Korean government's legitimate regulatory actions can be reinterpreted as 'discrimination against a foreign company' by the US side is the starting point of this incident.
A deeper cause can be found in the Trump administration's trade policy stance. Since its inception, the Trump administration has defined any action restricting the market access of US digital service companies abroad as an 'unfair trade practice' and has used it as a tool for trade pressure. The explicit warning from a White House official that "The Trump administration will not tolerate unfair trade practices, including actions that restrict market access for American digital services" [8] suggests that this issue is being handled as part of the US's digital trade strategy, beyond the scope of an individual company's problem. In other words, the Coupang incident is being used as a symbolic case demonstrating the Trump administration's willingness to exert trade pressure even on its allies.
Furthermore, the political motivations of the Republican Party in the US Congress are also at play. The interim report by the Republican members of the US House Judiciary Committee, based solely on Coupang's claims, and the collective letter sent by 54 Republican House members [8] are the result of Coupang's strategic lobbying efforts towards the US political establishment. The fact that the testimony of Coupang's interim representative at the US congressional hearing was directly reflected in the report [3] indicates that the Korean government's position was not adequately represented in the US political process, revealing a structural vulnerability in Korea's diplomatic capacity with the US Congress.
2. Structural Context
Political Structure
At the political level, this incident occurred at the intersection of South Korean domestic politics and US foreign policy. The White House official's explicit reference to the "Lee Jae-myung administration" in the statement [1][8] indicates that the US is aware of South Korea's domestic political landscape and is using it as a tool for pressure. This can be interpreted as direct dissatisfaction expressed by the US regarding policy directions linked to specific political factions in Korea, extending beyond mere corporate protection, and thus carries the character of external pressure on Korea's sovereign policy decisions.
Internally, the issue is politically sensitive in South Korea. The Democratic Party of Korea's strong opposition to the US Congressional report [4] has elevated the matter to a domestic political issue. The government's stance on the Coupang issue could lead to political evaluations of its ability to manage ROK-US relations. National Security Advisor Wi Sung-lak's direct briefing [1][6] signifies that the issue has been elevated to a national security agenda beyond a mere trade dispute, and simultaneously reflects the government's burden of managing this issue politically.
Economic Structure
From an economic structural perspective, this incident starkly illustrates the tension between regulatory sovereignty and market openness in the digital platform economy. While the Korean government asserts that its investigation into Coupang's data breach was lawful under domestic law [1][6], the US side frames it as a restriction on digital service market access, applying the framework of trade agreement violations [5][7]. In particular, the US House report's claim that such measures could "result in economic losses exceeding $500 billion for the US over the next decade" [8] is interpreted as a deliberate strategy to expand an individual corporate matter into a discourse of macroeconomic damage, thereby maximizing negotiation leverage.
Furthermore, this incident is directly linked to the implementation of the Joint Fact Sheet agreed upon by the ROK-US leaders last November. By claiming that Korea's investigation of Coupang violated the trade agreement stipulated in the Joint Fact Sheet signed by the leaders [5], the Coupang issue has now escalated into a trade dispute over the implementation of an agreement signed by the heads of state. This creates a structural disadvantage for Korea, potentially placing it in a defensive position in future ROK-US trade consultations.
Security Structure
From a security perspective, the most serious implication of this incident is that trade friction could become linked to security cooperation agendas. Currently, negotiations are underway between South Korea and the United States regarding nuclear-powered submarines, uranium enrichment, and spent nuclear fuel reprocessing—matters directly related to South Korea's core security interests. Amidst the continuous delays in these negotiations [5][8], there are concerns in diplomatic circles that the U.S. might use the Coupang issue as a pretext to further postpone the nuclear energy talks [5][8]. This suggests that the U.S. could employ a 'linkage strategy,' leveraging trade pressure as a bargaining chip for security cooperation.
This potential security linkage poses complex challenges to the management of the ROK-U.S. alliance. The statement by National Security Advisor Wi Sung-lac, "We will make efforts to isolate and separate this issue so that it does not excessively escalate and create ripples in other areas of ROK-U.S. relations" [5][8], indicates that the South Korean government already recognizes this linkage risk as serious. However, the high likelihood that the Coupang issue and the nuclear-powered submarine issue will be discussed at the same table within the framework of the Joint Fact Sheet implementation talks [7][8] reveals the structural difficulty of physically separating these two agendas.
3. Comparison of Historical Precedents and Similar Cases
The most similar historical precedent to the current situation is the trade friction between the U.S. and Japan in the 1980s and 1990s. At that time, the U.S. characterized Japan's practices in the semiconductor, automobile, and retail markets as 'unfair trade' and exerted strong trade pressure, including invoking Super 301 and designating Japan as a priority foreign country. In particular, the U.S. designation of Japan under Super 301 in 1989 went beyond mere trade imbalances, representing an attempt by the U.S. to alter the domestic economic structure and regulatory practices of an ally. The current Coupang situation, where the U.S. defines South Korea's domestic regulatory actions as violations of trade agreements and exerts pressure through its executive branch, is structurally similar to this historical pattern.
Furthermore, a notable aspect of the U.S.-Japan trade friction was its complex entanglement with the security alliance relationship. While Japan resisted U.S. trade pressure, its structural vulnerability due to high security dependence ultimately led it to make significant concessions. South Korea faces a similar structural dilemma, as trade friction is occurring while it remains highly dependent on the U.S. in security areas such as the presence of U.S. Forces Korea, extended deterrence, and cooperation on nuclear-powered submarines.
A more recent similar case is the U.S. pressure on the EU regarding Digital Services Taxes (DST). When EU countries like France and the UK imposed DSTs on American tech giants such as Google, Apple, and Amazon, the Trump administration characterized this as discriminatory action against American companies and threatened retaliatory tariffs. This case demonstrates that it has been a consistent strategy of the Trump administration to target the digital regulatory policies of its allies as subjects of trade pressure. The investigation into Coupang in South Korea can also be understood as an extension of this pattern of U.S. digital trade pressure.
South Korea's own historical precedent can be found in the South Korea-China trade friction surrounding the 2016-2017 deployment of THAAD. At the time, China expressed its dissatisfaction with security issues through economic retaliation (e.g., the Hallyu ban, boycott of Lotte), and South Korea experienced an extreme dilemma between security and the economy. Although the direction of this incident is reversed—where the United States seeks to link trade issues with security cooperation—it serves as an important comparative case in that it shows a structurally similar pattern of 'security-economy linkage pressure.' The precedent of the THAAD incident, where South Korea could not elicit an explicit acknowledgment of retaliation from China and concluded with a vague expression of the '3 Noes' position, also offers a lesson on how limited South Korea's response can be to the linkage pressure from great powers.
4. Key Variables in Issue Development
The key variables that will determine the future development of this issue can be broadly categorized into four.
First, the method of progress in the Joint Fact Sheet implementation talks. Currently, both South Korea and the U.S. are engaged in inter-agency consultations to implement the agreement reached at the summit last year, and it is highly likely that the Coupang issue and nuclear cooperation will be discussed within this framework [7][8]. If the U.S. attempts to link the Coupang issue as a prerequisite for nuclear cooperation in these talks, South Korea will face a very difficult choice between trade concessions and security interests. Conversely, if South Korea can successfully separate the two agendas, the room for negotiation will be significantly widened.
Second, the speed at which the narrative surrounding Coupang spreads within the U.S. Congress. Currently, the U.S. House report is an 'interim report,' and the final report has not yet been released [3][5]. The content and severity of the final report, and whether the U.S. Congress will pursue additional legislative actions or hearings based on it, are important variables. In particular, if the collective actions of Republican lawmakers expand, this issue could evolve beyond inter-agency consultation channels into a tool of trade pressure at the congressional level.
Third, South Korea's capacity for diplomacy and public relations towards the U.S. Congress. Currently, there is a tendency for Coupang's one-sided claims to spread without verification within the U.S. political sphere [2][8]. The extent to which the South Korean government and National Assembly can effectively convey the facts and counterarguments to the U.S. Congress and administration will be a crucial turning point in the issue's development. While the Ministry of Foreign Affairs has stated that it "plans to closely communicate with the U.S. Congress and administration to continuously correct the facts" [8], this could remain at a declarative level without substantial lobbying capabilities and networks.
Fourth, the progress of domestic legal and administrative procedures related to Coupang. The South Korean government asserts that the investigation into Coupang is being conducted lawfully and non-discriminatorily [1][6]. However, if sanctions are imposed by relevant agencies such as the Fair Trade Commission and the Personal Information Protection Commission, the intensity of the U.S. pressure could vary depending on the content and severity of these decisions. If the sanctions against Coupang are perceived as significantly harsher compared to similar domestic companies, it could lend weight to the U.S.'s claims of discrimination. Conversely, if procedural fairness is clearly demonstrated, South Korea's counterarguments will be strengthened.
III. Scenario Analysis
ROK-U.S. Trade Friction: Coupang Discrimination Controversy and White House Pressure — Scenario Analysis
1. Optimistic Scenario (Probability of Occurrence: Approx. 20%)
Development
The optimistic scenario unfolds with both South Korea and the U.S. managing to contain the Coupang issue at an early stage through diplomatic channels, effectively preventing its escalation to other core agendas in bilateral relations. Specifically, this path involves the Coupang issue being downgraded to a technical and practical matter and handled within the framework of inter-agency consultations for the implementation of the ROK-U.S. Joint Fact Sheet, which is currently underway [7]. If a compromise is reached where the South Korean government presents concrete measures reaffirming the principle of non-discriminatory treatment of U.S. digital companies, and the U.S. accepts these measures, the pressure from the White House and Congress could gradually decrease.
For this scenario to materialize, several conditions must be met. First, the South Korean government must succeed in sufficiently convincing the U.S. Congress and administration of the legal justification and non-discriminatory nature of the investigation into Coupang. National Security Advisor Wi Sung-lac's statement, "We will make efforts to ensure that this issue does not excessively escalate and create ripples in other areas of ROK-U.S. relations" and "We will make efforts to isolate and separate the issue" [5][8], indicates that the South Korean government is already pursuing a management strategy in this direction. Additionally, the U.S. side must internally conclude that the Coupang issue is not significant enough to undermine the strategic value of the ROK-U.S. alliance. If the Trump administration decides not to exhaust the Coupang issue as a bargaining chip for greater strategic interests, such as security cooperation on the Korean Peninsula, nuclear negotiations, and defense cost-sharing, the feasibility of this scenario increases.
Impact
If this scenario is realized, the second meeting of the ROK-U.S. nuclear energy consultations can be promptly scheduled, and negotiations on the construction of nuclear-powered submarines and uranium enrichment can return to their normal course [5][8]. In the trade domain, the implementation talks for the Joint Fact Sheet will proceed as planned, establishing a precedent where U.S. concerns regarding South Korea's digital regulatory policies are managed within institutional dialogue channels. From a corporate environment perspective, regulatory uncertainty for U.S. digital companies operating in the South Korean market will be somewhat resolved, and conversely, the potential retaliatory risks faced by South Korean companies in the U.S. market will also decrease. However, even in this scenario, the South Korean government's investigation into Coupang will continue, so Coupang's dissatisfaction will not be fully resolved, and potential sources of conflict will remain.
2. Baseline Scenario (Probability of Occurrence: Approx. 55%)
Development
The most realistic baseline scenario involves the Coupang issue not being resolved in the short term, remaining a persistent point of friction between South Korea and the U.S., while both countries pursue other strategic cooperation agendas in parallel, forming a 'two-track' approach. In this case, the U.S. will not completely withdraw its pressure on the Coupang issue but will maintain strategic ambiguity, refraining from escalating it to a level that shakes the entire ROK-U.S. alliance. The South Korean government will also respond by continuing to refute the facts and state its principled position while maintaining practical consultation channels with the U.S. [1][6].
In this scenario, the Coupang issue will be included as one of the agendas in the Joint Fact Sheet implementation talks and will be continuously discussed, but the negotiations will be prolonged without a decisive resolution [7]. It is highly probable that the Republican Party in the U.S. Congress will continue to exert pressure by releasing a final report following the interim report or by holding additional congressional hearings. Simultaneously, the Trump administration may employ a package pressure strategy, using the Coupang issue as leverage in trade negotiations with South Korea and implicitly linking it with other agendas such as tariff negotiations or defense cost-sharing talks. The second meeting of the ROK-U.S. nuclear energy consultations will remain in a "coordination" status, with the resolution of the Coupang issue potentially becoming an unofficial condition for resuming the talks [5][8].
Impact
Under the baseline scenario, the ROK-U.S. nuclear cooperation agenda will be most directly affected. Negotiations on the construction of nuclear-powered submarines and uranium enrichment may face difficulties in progress due to the U.S.'s passive stance as long as the Coupang issue remains unresolved [5]. This directly results in a loss to South Korea's core national interest of expanding strategic autonomy. In the trade domain, the U.S. will intensify its scrutiny of South Korea's overall digital regulatory policies and continuously raise objections regarding the revision or enforcement of related laws such as the Personal Information Protection Act and the Electronic Commerce Act. This will act as de facto external pressure on South Korea's digital regulatory sovereignty and could set a precedent that chills the independent judgment of South Korean regulatory authorities in future similar cases.
From a corporate environment perspective, while Coupang's market capitalization continues to decline and its business uncertainty persists [8], other U.S. digital companies operating in the South Korean market will have an incentive to learn from and emulate the strategy of exerting pressure through the U.S. political sphere in response to South Korean government regulations. Conversely, South Korean companies will face an environment where they must more cautiously consider political risks when expanding their businesses in the U.S. market. In the context of U.S.-China strategic competition, the signal that the U.S. does not hesitate to exert digital trade pressure even on its allies could indirectly increase pressure on South Korea to be incorporated into the U.S.-led digital trade order.
3. Pessimistic Scenario (Probability of Occurrence: Approx. 25%)
Development
The pessimistic scenario involves the Coupang issue escalating into a complex crisis that pressures the entire ROK-U.S. relationship. This scenario unfolds as the U.S. elevates the Coupang issue from a mere trade dispute to a matter of South Korea's credibility towards the U.S. and explicitly links it with security cooperation agendas. Specifically, this includes situations where the Trump administration sets the resolution of the Coupang issue as a formal or informal prerequisite for resuming nuclear negotiations, or signals consideration of tariffs or trade sanctions against South Korea. The path where the U.S. House Judiciary Committee recommends trade retaliatory measures against South Korea in its final report, and this leads to actual legislative or administrative actions, is also part of this scenario [3][5].
Several factors could trigger this scenario. If the South Korean government takes additional regulatory or punitive measures against Coupang, the U.S. could interpret this as clear evidence of a violation of the Joint Fact Sheet and significantly intensify trade pressure [5][7]. Furthermore, if the domestic political situation in South Korea deteriorates and the Coupang issue becomes a more prominent domestic political issue, it could create a vicious cycle where the U.S. interprets this as evidence of an 'anti-U.S. stance,' thereby strengthening the justification for pressure. Additionally, if the U.S. fails to obtain sufficient concessions from South Korea in other trade negotiations (e.g., tariff negotiations, defense cost-sharing negotiations), it cannot be ruled out that the U.S. will use the Coupang issue as an additional leverage, escalating complex pressure.
Impact
If the pessimistic scenario materializes, the ROK-U.S. relationship will enter a complex crisis phase where both trade and security deteriorate simultaneously. Nuclear cooperation agendas will be effectively frozen indefinitely, and South Korea's goal of expanding strategic autonomy related to the construction of nuclear-powered submarines and uranium enrichment will face severe setbacks [5][8]. This goes beyond mere negotiation delays and acts as a structural impediment to South Korea's mid- to long-term defense industry development plans and the strengthening of its strategic deterrence capabilities. If the foundation of trust in the ROK-U.S. alliance is undermined, questions may also arise about the effectiveness of core security cooperation mechanisms such as the Nuclear Consultative Group (NCG).
In terms of trade and economic security, if the U.S. actually considers or implements tariffs or trade sanctions on South Korean products, South Korea's key export industries, including semiconductors, automobiles, and batteries, will be hit. In particular, if the Coupang issue is added as a justification for trade pressure on top of the existing uncertainty due to U.S. tariff policy changes, it will create severe uncertainty for the overall investment and export strategies of South Korean companies in the U.S. In the digital economy sector, the establishment of a precedent where the South Korean government's core regulatory powers, such as platform regulation, personal information protection, and fair trade enforcement, are effectively constrained by U.S. trade pressure will result in a long-term erosion of South Korea's digital regulatory sovereignty.
In the context of U.S.-China strategic competition, the pessimistic scenario will further weaken South Korea's strategic position. If the ROK-U.S. alliance shows cracks due to trade disputes, China will likely seek to exploit this as an opportunity to expand its influence over South Korea, potentially forcing South Korea into difficult strategic choices between the U.S. and China. Furthermore, if South Korea appears to yield to U.S. trade pressure, it will be recorded as the response shown by South Korea when other allies like Japan and the EU faced similar pressure, leading to a decline in its international negotiating power.
4. Scenario Impact Analysis by Issue Area
Trade and Economic Security
The trade and economic security issue area is the core stage of this incident, and it is the area where the most direct and immediate impacts are observed across all three scenarios. In the optimistic scenario, the Joint Fact Sheet implementation talks proceed normally, allowing U.S. concerns regarding South Korea's digital regulatory policies to be managed within institutional dialogue channels, and maintaining the foundation for cooperation in areas such as tariffs, industrial policy, and technical standards. In this case, South Korea can achieve a balance by reaffirming the principle of non-discriminatory treatment of U.S. digital companies while substantially preserving the independence of domestic regulatory enforcement.
In the baseline scenario, a pattern solidifies where the U.S. attempts to structurally intervene in South Korea's overall digital trade policy using the Coupang issue as leverage. Given that the U.S. House Judiciary Committee report claims South Korea's actions violate the Joint Fact Sheet [5], the U.S. can use this as grounds to continuously raise objections regarding various regulatory actions by South Korea, including platform regulations, enforcement of personal information protection laws, and fair trade investigations. This leads to a structural burden for South Korea, which must constantly manage the tension between regulatory sovereignty and obligations for market opening in the process of implementing FTAs and trade agreements.
In the pessimistic scenario, the Coupang issue expands into a comprehensive justification for U.S. trade pressure on South Korea, potentially encompassing key South Korean export industries such as semiconductors, automobiles, and batteries. Particularly, given that the Trump administration is already actively using tariffs as a major trade tool, if the Coupang issue is used as a justification for additional tariff imposition or trade sanctions, it will inflict a severe shock on the entire South Korean economy. In terms of supply chain reorganization, if the U.S. exacerbates the investment and business environment for South Korean companies within the U.S. citing restrictions on market access, it will increase uncertainty across the overall global supply chain strategies of South Korean companies.
Alliance and Multilateral Security
In the alliance and multilateral security issue area, this incident typifies the complex challenges in alliance management that arise when trade friction becomes linked with security cooperation agendas. In the optimistic scenario, the South Korean government's 'isolation and separation' strategy succeeds, and the Coupang issue is managed without causing substantial damage to the foundation of security cooperation in the ROK-U.S. alliance [5][8]. In this case, combined defense posture and Nuclear Consultative Group (NCG) operations proceed normally, and nuclear negotiations can also be conducted independently as a separate strategic agenda.
In the baseline scenario, even if the Coupang issue does not directly undermine the foundation of trust in the ROK-U.S. alliance, it will have the effect of hindering substantial progress in security cooperation through delays in nuclear negotiations [5]. If the pattern of the U.S. delaying nuclear negotiations under the pretext of the Coupang issue repeats, as feared in diplomatic circles, a structure will be formed where South Korea's goal of expanding strategic autonomy is continuously constrained by trade issues. This will also negatively impact South Korea's mid- to long-term goal of establishing itself as an equal partner within the ROK-U.S. alliance. In terms of trilateral security cooperation among South Korea, the U.S., and Japan, the political momentum for trilateral security cooperation could weaken if ROK-U.S. trade friction persists.
In the pessimistic scenario, trade friction transforms into a complex crisis in alliance management, putting the structural foundation of trust in the ROK-U.S. alliance itself to the test. If the Trump administration defines the Coupang issue as a matter of South Korea's credibility towards the U.S. and explicitly links it with security cooperation agendas, South Korea will be forced into an extremely difficult choice between trade concessions and security interests. In this situation, a dilemma structure will be formed where yielding to U.S. pressure compromises regulatory sovereignty, while resisting it disrupts security cooperation. This could also send a negative signal to mid- to long-term strategies seeking to expand South Korea's role in U.S.-led multilateral security frameworks such as AUKUS and the Quad.
U.S.-China Strategic Competition
While the connection with the U.S.-China strategic competition issue area is not direct, the implications of this incident within the structural context of U.S.-China strategic competition warrant attention. In the optimistic scenario, the early resolution of ROK-U.S. trade friction maintains the foundation for South Korea's stable participation in discussions on the U.S.-led digital trade order and supply chain reorganization. In this case, South Korea can solidify its position as a reliable partner within the U.S. camp amidst U.S.-China strategic competition and maintain its voice in cooperation related to China's high-tech export controls and supply chain reorganization.
In the baseline scenario, the signal that the U.S. does not hesitate to exert digital trade pressure even on its allies indirectly increases the pressure on South Korea within the U.S.-led digital trade order. This also has the indirect effect of limiting South Korea's efforts to maintain space for digital economic cooperation with China. In the context of U.S.-China strategic competition, from the perspective of monitoring the impact of changes in U.S. industrial and trade policies on South Korea's supply chain strategy, the Coupang incident is recorded as a precedent demonstrating the U.S.'s willingness to intervene even in the digital market regulatory practices of its allies.
In the pessimistic scenario, a paradoxical situation may arise where the cracks in ROK-U.S. relations provide China with an opportunity to expand its influence over South Korea. If the ROK-U.S. alliance weakens due to trade disputes, China will likely attempt to narrow South Korea's strategic options by strengthening economic incentives and diplomatic approaches towards South Korea. This would also contradict the U.S.'s interest in securing South Korea's cooperation in its policies for export controls to China and supply chain reorganization, thus creating a strategically undesirable outcome for the U.S. itself. It should also be considered that this structural paradox could act as an inherent deterrent, preventing the U.S. from escalating the Coupang issue to a level that shakes the entire ROK-U.S. alliance.
IV. Analysis of Response Measures
Korea-US Trade Friction: Coupang Discrimination Controversy and White House Pressure — Analysis of Response Measures
1. Response Measures for the Optimistic Scenario
Response Options
In the optimistic scenario, where the Coupang issue is resolved early through diplomatic channels, the key response options for the South Korean government consist of two main pillars: 'Proactive Fact-Setting' and 'Early Activation of Institutional Dialogue Channels.' The former involves the South Korean government systematically providing specific documents and data to the US Congress and administration that establish the legal basis, procedural legitimacy, and non-discriminatory nature of the Coupang investigation. Currently, the response is limited to statements from the Ministry of Foreign Affairs spokesperson and the National Security Advisor[1][6]. However, it is necessary to escalate the response by directly delivering the South Korean government's official position paper to the Republican members of the US House Judiciary Committee and, if necessary, requesting participation of South Korean officials in US congressional hearings or separate briefings. The latter involves promptly activating the inter-agency consultation framework for the implementation of the Joint Fact Sheet to relegate the Coupang issue to a technical and practical matter, and to strategically separate it from strategic agenda items such as nuclear negotiations[7][8].
Additional options to consider include the South Korean government proactively announcing specific policy measures reaffirming the principle of non-discriminatory treatment of US digital companies. For example, formalizing a channel to support foreign companies in responding to domestic regulations or more transparently disclosing the criteria for applying digital platform regulations would fall under this category. This approach seeks a balance that substantively addresses US concerns without compromising South Korea's regulatory sovereignty.
Analysis of Pros and Cons
The main advantage of the 'Proactive Fact-Setting' option is its ability to block the spread of Coupang's unilateral claims within the US political sphere. Currently, testimony from Coupang's interim representative serves as almost the sole source of information within the US Congress[3], and the Ministry of Foreign Affairs spokesperson has officially acknowledged that the report was written without sufficient transmission of the South Korean government's position[7]. Therefore, proactive information provision by the South Korean side is a realistic means to change public opinion within the US Congress. The disadvantage is that it may be difficult to elicit a change in attitude solely through the provision of facts, given that the Republican Party in the US Congress has already made its political stance clear. Furthermore, if the South Korean government focuses solely on defensive explanations, it could inadvertently legitimize the US side's claims.
The 'Early Activation of Institutional Dialogue Channels' option has the effect of keeping the Coupang issue within a diplomatically manageable framework and provides the US side with a negotiation table, thereby offering an incentive to reduce the need for public pressure. However, the core risk is that if the Coupang issue and nuclear negotiations are discussed together within this channel[8], it could institutionalize the possibility of the US using the Coupang issue as leverage in nuclear negotiations.
Feasibility and Risk Assessment
The response options in this scenario have high technical feasibility but are assessed to have medium political feasibility. While the South Korean government can immediately begin preparing factual data and activating diplomatic channels, the possibility of pressure being alleviated solely by refuting facts is limited, given that the Trump administration and the Republican Congress are strategically using the Coupang issue as a tool for trade pressure. The main risk is that South Korea's preemptive concessions could lead to the 'paradox of concessions,' triggering further demands from the US. Additionally, domestically, with the Democratic Party strongly opposing the US Congressional report[4], there could be domestic political costs if the government moves to accommodate the US side's demands.
Priority Response Measures
The top priority response measure in the optimistic scenario is strengthening congressional diplomacy in parallel with the early activation of Korea-US working-level consultation channels. Specifically, the most effective approach is to hold consultations for the implementation of the Joint Fact Sheet as quickly as possible to handle the Coupang issue within an institutional framework, while simultaneously pursuing individual meetings with members of the Republican House Judiciary Committee through the South Korean Embassy in the US to directly convey the South Korean government's position. In this process, it is crucial to clearly communicate to the US side the principle of separating the Coupang issue from nuclear negotiations[5].
2. Response Measures for the Baseline Scenario
Response Options
In the baseline scenario, characterized by a 'two-track' approach where the Coupang issue remains a persistent source of friction without short-term resolution, a more complex and multi-layered response strategy is required. The response options available to South Korea in this scenario can be broadly divided into three categories.
The first is the 'Principled Defense + Strategic Separation' option. This strategy involves consistently upholding the legal legitimacy of the Coupang investigation while isolating the issue to prevent it from spilling over into other areas of the Korea-US alliance. National Security Advisor Wi Sung-lac's statement that "efforts will be made to prevent this issue from escalating excessively and impacting other areas of Korea-US relations" aligns with the direction of this option[5][8]. In practice, this requires strictly separating and operating the diplomatic and trade channels responsible for the Coupang issue from the security cooperation channels, and consistently sending diplomatic signals explicitly rejecting any attempt by the US side to link the two issues.
The second is the 'Leveraging Multilateral Frameworks' option. If the US pressure expands beyond the individual company Coupang to encompass South Korea's regulations on US digital companies in general, South Korea can guide the issue to be addressed within the framework of WTO rules, OECD digital economy principles, or Korea-US FTA dispute settlement procedures, rather than as a bilateral matter. This has a dual effect of protecting South Korea's regulatory sovereignty by absorbing unilateral US pressure within the framework of multilateral norms, while also demonstrating a commitment to complying with international rules.
The third is the 'Utilizing Asymmetric Leverage' option. South Korea possesses various strategic leverages over the US, including defense cost-sharing, the presence of US Forces Korea, cooperation in semiconductor and battery supply chains, and deterrence cooperation against North Korea. If US pressure regarding Coupang intensifies, South Korea can employ indirect responses by increasing the cost of US pressure by diplomatically reminding the US of these strategic values. However, it is more appropriate to implicitly utilize this option within diplomatic contexts rather than explicitly.
Analysis of Pros and Cons
The advantage of the 'Principled Defense + Strategic Separation' option is that it can protect other areas of the alliance relationship without undermining South Korea's rule of law and regulatory sovereignty. This option is also the direction currently being pursued by the South Korean government[1][8]. The disadvantage is that the separation strategy may face limitations if the US side intentionally attempts to link the Coupang issue with nuclear negotiations. Indeed, there are already concerns in diplomatic circles about the possibility of the US delaying nuclear negotiations using the Coupang issue as a pretext[5], and the fact that the schedule for the second round of nuclear negotiations has not yet been confirmed supports this concern.
The 'Leveraging Multilateral Frameworks' option has the advantage of building a defense against unilateral US pressure using international norms. However, the Trump administration has a low level of respect for multilateral norms themselves, and the WTO dispute settlement process is time-consuming, limiting its effectiveness as a short-term response to pressure. Furthermore, South Korea's choice of multilateral channels could be perceived by the US as a refusal to cooperate, potentially providing grounds for deteriorating relations.
The 'Utilizing Asymmetric Leverage' option has the effect of increasing the cost of US pressure, but explicitly using leverage within an alliance relationship risks undermining the foundation of trust in the relationship. Particularly considering the Trump administration's tendency to approach alliances from a transactional perspective, this option can be a double-edged sword.
Feasibility and Risk Assessment
The response options in the baseline scenario generally have medium feasibility. The 'Principled Defense + Strategic Separation' option, being the direction already pursued by the South Korean government, has the highest feasibility, but it has limitations in completely blocking US linkage pressure. The 'Leveraging Multilateral Frameworks' option is effective in the medium to long term but is unsuitable for short-term pressure response. The 'Utilizing Asymmetric Leverage' option requires caution in its implementation due to its high political sensitivity.
The most significant risk in this scenario is the possibility of the South Korean government's response fatigue accumulating as the Coupang issue drags on, and the US side's pressure gradually becoming effective through a 'salami-slicing tactic.' The pattern of phased pressure by the Republican Party in the US Congress, from the February hearing to the April letter and the July report[8], demonstrates that this risk is realistic.
Priority Response Measures
The top priority response measure in the baseline scenario is a A composite strategy that maintains the basic tone of 'principled defense + strategic separation' while significantly strengthening diplomacy with the U.S. Congress.. Specifically, it is necessary to form a dedicated response team for the Coupang issue at the South Korean Embassy in the US and to strengthen solidarity with pro-South Korea lawmakers in the US Congress to correct the information environment that is heavily tilted towards the Republican Party. Simultaneously, the strategy of early agenda-setting of the Coupang issue through the Korea-US trade consultation channel to absorb US dissatisfaction within an institutional framework must be pursued. To prevent linkage with nuclear negotiations, it is crucial to make separate diplomatic efforts to promptly confirm the schedule for the second round of nuclear negotiations[5][8].
3. Response Measures for the Pessimistic Scenario
Response Options
In the pessimistic scenario, where the Coupang issue escalates into a complex crisis by being linked with nuclear negotiations and the overall Korea-US alliance, a more intense response is unavoidable. The response options available to South Korea in this scenario are broadly narrowed down to two.
The first is the 'Direct High-Level Communication' option. If the Coupang issue escalates to the point of having ripple effects across the entire alliance, responses through working-level channels will be insufficient. A comprehensive resolution will require direct communication between the leaders of South Korea and the US or high-level contact at the level of foreign ministers or national security advisors. This option involves maintaining South Korea's principled stance on the Coupang issue while seeking a package deal that identifies and satisfies the core interests of the US. For example, an exchange where South Korea provides measures to enhance transparency in digital platform regulations, in return for the US proceeding with nuclear negotiations and reverting the Coupang issue to bilateral consultation channels, would fall under this category.
The second is the 'Public Declaration of Principles + International Public Opinion Mobilization' option. If US pressure reaches a level that clearly infringes upon South Korea's rule of law and regulatory sovereignty, South Korea can respond by publicly informing the international community and aligning with other countries facing similar situations. This strategy aims to increase the international cost of unilateral US actions through informal cooperation with countries such as the EU, Japan, and Australia, which have experienced US digital trade pressure. This approach also leverages the US's strategic need to rally its allies within the context of US-China strategic competition.
Analysis of Pros and Cons
The greatest advantage of the 'Direct High-Level Communication' option is its ability to exercise political decisiveness to resolve complex intertwined issues. Given the Trump administration's tendency to prefer direct high-level personal diplomacy over working-level channels, this option also has the practical advantage of aligning with the Trump administration's decision-making style. The disadvantage is that the pressure to make substantial concessions on the Coupang issue during high-level communication may intensify, potentially leading to politically sensitive outcomes domestically.
The 'Public Declaration of Principles + International Public Opinion Mobilization' option offers the strongest protection for South Korea's regulatory sovereignty, but it carries a high risk of pushing the Korea-US relationship into open confrontation. The Trump administration tends to react sensitively to public criticism, and the core risk is that pursuing this option could lead to retaliatory measures extending beyond the Coupang issue to the entire Korea-US relationship.
Feasibility and Risk Assessment
The response options in the pessimistic scenario are high-risk, high-reward, with both feasibility and risk being high. The 'Direct High-Level Communication' option is feasible if sufficient trust has been established between the leaders of South Korea and the US, but it is uncertain whether the current relationship between the Lee Jae-myung administration and the Trump administration is mature enough to support this. The 'Public Declaration of Principles + International Public Opinion Mobilization' option is difficult to implement in practice due to the nature of the alliance relationship and should only be considered as a last resort.
The most significant risk in this scenario is that if the Coupang issue becomes completely linked with nuclear negotiations, South Korea's core national interests related to the construction of nuclear-powered submarines and uranium enrichment will be directly threatened[5][8]. In this case, South Korea will face the dual burden of defending against both trade and security issues simultaneously, and its negotiating power could be significantly weakened.
Priority Response Measures
The top priority response measure in the pessimistic scenario is to immediately initiate direct high-level communication to block the linkage between nuclear negotiations and the Coupang issue. Specifically, the top priority is for the National Security Advisor or the Minister of Foreign Affairs to make urgent contact with their US counterparts to reaffirm the principle of separating the two issues and to reach an agreement to revert the Coupang issue to a separate trade consultation channel. Simultaneously, South Korea must secure negotiation space by presenting a package of measures reaffirming the principle of non-discriminatory treatment of US digital companies, thereby satisfying the US side's rationale. In this process, naturally highlighting South Korea's strategic value—such as cooperation in semiconductor supply chains, its role in the Indo-Pacific strategy, and cooperation in deterring North Korea—within the diplomatic context can contribute to strengthening negotiating power.
4. Comprehensive Recommendations Across Scenarios
As common response principles encompassing the three scenarios, the South Korean government must consistently maintain the following three strategic directions. First, Proactive Management of Factual Relationsis essential. The government must consistently strengthen diplomacy with the U.S. Congress, systematically conveying South Korea's position without allowing Coupang's unilateral claims to spread within the U.S. Congress and administration [2][7]. Second, Consistent Maintenance of the Principle of Issue Separationis crucial. To prevent the Coupang issue from being linked to security agendas such as nuclear cooperation, defense cost-sharing, and combined defense posture, the principle of separation must be explicitly declared through all diplomatic channels and effectively enforced [5][8]. Third, Prevention of Undermining Domestic Rule of Lawis paramount. While succumbing to U.S. pressure and halting or scaling back the investigation into Coupang might temporarily alleviate friction, it would undermine the South Korean government's regulatory credibility and set a precedent of vulnerability to future external pressure, making it unacceptable under any scenario [2].
V. Final Recommended Response Measures
South Korea-U.S. Trade Friction: Coupang Discrimination Controversy and White House Pressure — Final Recommended Response Measures
1. Overall Assessment and Recommended Response Measures
Overall Assessment of the Situation
The current Coupang situation is superficially a regulatory dispute concerning an individual company, but it is substantively a complex crisis with three overlapping dimensions. The first dimension is trade and economic security, where the structural pattern of the U.S. utilizing access to the digital services market as a key tool for trade pressure is being directly applied to South Korea through this incident. The explicit warning from the Trump administration that it "will not tolerate unfair trade practices, including those that limit market access for American digital services" [8] suggests the potential for the Coupang issue to be institutionalized as part of the U.S.'s digital trade strategy. The second dimension is alliance and security, where the risk of this issue becoming directly linked to South Korea's core security interests, such as nuclear-powered submarine development and uranium enrichment talks, is materializing [5][8]. The third dimension is political and diplomatic, where the White House explicitly naming the "Lee Jae-myung administration" in its pressure [1] sets a precedent for the U.S. to utilize South Korea's domestic political landscape as a tool for external pressure, thus demanding a sovereign response.
Given this complex nature, the strategic direction the South Korean government should take can be summarized as a dual structure of 'principled defense and strategic separation.' That is, while maintaining a firm and consistent principled stance on the legal legitimacy of the Coupang investigation, it must simultaneously pursue an 'issue compartmentalization' strategy to actively block the issue from spilling over into security cooperation agendas. National Security Advisor Sung Kim's statement about making "efforts for isolation and separation" [5] is in the right direction, but it is urgent to transition from a declarative level to concrete implementation plans.
Core Recommended Response Measures
The core response measures recommended to the South Korean government consist of the following five pillars.
First, immediate strengthening of diplomacy with the U.S. Congress. The most serious structural vulnerability currently is that Coupang's unilateral claims are being accepted within the U.S. Congress without factual verification [2][3]. The fact that the South Korean government's position was not sufficiently reflected while the Republican side of the U.S. House Judiciary Committee drafted its report after hearing only from Coupang's interim representative [3] highlights the vacuum in diplomacy with the U.S. Congress. Therefore, centered around the South Korean Embassy in the U.S., intensive engagement with the Democratic members of the U.S. House Judiciary Committee and pro-South Korea Republican lawmakers must be initiated immediately, and a detailed fact sheet containing the South Korean government's official position and legal basis must be directly submitted to Congress. In response to the letter sent by 54 Republican lawmakers [8], it would be effective for the South Korean National Assembly to concurrently pursue parliamentary diplomacy with the U.S. Congress.
Second, strategic utilization of the consultation channel for the implementation of the Joint Fact Sheet. Currently, this issue is likely to be discussed within the framework of inter-agency consultations for the implementation of the Joint Fact Sheet agreed upon by the leaders of South Korea and the U.S. [7]. This channel involves discussions on digital law and policy issues, including the Coupang matter, alongside security issues such as the development of nuclear-powered submarines and uranium enrichment [8]. The South Korean government must actively intervene from the agenda-setting stage to handle the Coupang issue as an independent agenda at a technical and practical level within this consultation channel, while simultaneously preventing security cooperation agendas from becoming subordinate to trade disputes. Specifically, it is advisable to propose a consultation structure to the U.S. side that explicitly distinguishes between a digital trade subcommittee and a security cooperation subcommittee.
Third, international public discourse on the legal factual basis. The U.S. House report's characterization of Coupang's personal information leak incident as "unauthorized access to data systems by a disgruntled former employee" and the South Korean government's response as a "comprehensive offensive" [8] represent a serious distortion of the facts. To internationally demonstrate the legitimacy of the investigation procedures under domestic law, the South Korean government must publish an official White Paper, compiled in English, detailing the investigation results and legal grounds from relevant agencies such as the Personal Information Protection Commission and the Fair Trade Commission, and distribute it not only to the U.S. administration and Congress but also to international organizations like the EU and OECD to prove that South Korea's regulatory actions comply with international standards.
Fourth, proactive separation and protection of nuclear and security cooperation agendas. As there are concerns in diplomatic circles that the U.S. may further delay nuclear talks using the Coupang issue as a pretext [5][8], the South Korean government must immediately pursue separate high-level diplomatic contacts to confirm the schedule for the second round of nuclear talks. The development of nuclear-powered submarines and uranium enrichment are core security interests for South Korea and should not be used as bargaining chips in trade disputes. To this end, it is necessary to convey a diplomatic message through vice-ministerial channels of the Ministry of National Defense and the Ministry of Foreign Affairs, explicitly demanding the independence of security cooperation agendas from the U.S. side.
Fifth, enhancing the transparency of domestic digital regulatory governance. To prevent the recurrence of this incident, the governance structure must be strengthened to institutionally demonstrate that South Korea's digital regulatory system is applied non-discriminatorily to foreign companies. Specifically, it is necessary to consider establishing guidelines that enhance procedural transparency in regulatory investigations involving foreign companies and institutionalizing regular communication channels with major foreign companies. This would also have the effect of preventing potential friction with other major trading partners such as the EU and Japan, not just the U.S.
2. Short-Term/Mid-Term/Long-Term Action Plans
Short-Term Action Plan (Next 1-3 Months)
The most urgent task in the short term is to manage the current U.S. pressure and prevent the issue from spreading to the area of security cooperation. To this end, the Ministry of Foreign Affairs, through the South Korean Embassy in the U.S., must pursue urgent meetings with the Democratic ranking member and pro-South Korea lawmakers of the U.S. House Judiciary Committee and submit an English fact sheet containing the South Korean government's official position to Congress by July. Concurrently, the Ministry of Foreign Affairs' Office of the Chief Negotiator for Trade and the Ministry of Trade, Industry and Energy must promptly confirm the schedule for the next meeting of the Joint Fact Sheet Implementation Consultations, while proposing the explicit separation of the Coupang issue and security cooperation matters from the agenda-setting stage to the U.S. side [7].
The National Security Council must request the prompt confirmation of the schedule for the second round of nuclear talks through channels with its U.S. National Security Council (NSC) counterpart and clearly convey South Korea's position that this matter should not be linked to trade disputes. Furthermore, the Personal Information Protection Commission and the Fair Trade Commission must promptly prepare English materials outlining the legal basis and procedures for the Coupang investigation and provide them to the Ministry of Foreign Affairs to strengthen the factual basis for explanatory diplomacy with the U.S. [6]. At the National Assembly level, it is advisable for the Inter-Parliamentary Council of South Korea-U.S. Lawmakers to send a letter to the U.S. Congress explaining the constitutional authority and procedural legitimacy of the South Korean National Assembly's hearings [8].
Mid-Term Action Plan (3-12 Months)
In the mid-term, efforts should focus on building the institutional foundation to address the structural causes of this incident. First, the South Korean government should institutionalize regular communication channels with major foreign companies, including U.S. digital companies, to establish a mechanism for listening to companies' concerns and enhancing procedural transparency at the pre-investigation stage. This would have the effect of creating a buffer structure that can resolve potential disputes at the bilateral level before they escalate to the U.S. Congress and administration.
In terms of strengthening trade diplomacy capabilities, lobbying and public diplomacy capabilities to represent South Korea's position within the U.S. Congress must be systematically enhanced. The most significant vulnerability revealed in this incident was the considerable lack of access to the U.S. Congress by the South Korean government compared to Coupang's lobbying activities [3][8]. In the mid-term, consideration should be given to reinforcing the congressional affairs personnel at the South Korean Embassy in the U.S. and strengthening the legal and lobbying network that represents South Korean interests in the U.S. Furthermore, the Ministry of Trade, Industry and Energy and the Ministry of Foreign Affairs should regularize the South Korea-U.S. Digital Trade Consultations to establish a structure for sharing changes in digital regulatory policy with the U.S. in advance and preventing potential friction.
In terms of nuclear and security cooperation, the mid-term goal is to establish a structure where negotiations on the development of nuclear-powered submarines and uranium enrichment are conducted in a separate strategic dialogue channel completely independent of trade disputes. To this end, the Ministry of National Defense and the Ministry of Foreign Affairs should jointly strengthen the institutional framework for operating the South Korea-U.S. Nuclear Consultative Group (NCG) and Nuclear Consultations independently of trade issues, and continuously manage the trust relationship with their U.S. counterparts.
Long-Term Action Plan (1-3 Years)
In the long term, the policy system should be redesigned to address the structural vulnerabilities revealed by this incident, namely the legal and institutional gaps that allow domestic regulations on companies dominated by foreign capital to be transformed into trade pressure. Specifically, the procedural standards applied to regulatory investigations of foreign-capitalized companies should be aligned with international standards and made public in English so that foreign governments and companies can clearly understand South Korea's regulatory system.
In the context of U.S.-China strategic competition, a long-term consideration should be that if the U.S. pattern of consistently applying digital trade pressure even to its allies intensifies, South Korea must secure leverage by forming alliances with countries with similar positions, such as the EU and Japan. The EU is already implementing its own regulations on U.S. Big Tech companies like Google, Apple, and Meta, and Japan is also strengthening its digital platform regulations. If South Korea forms a common stance with these countries in the area of digital regulatory governance, a basis for collective response to unilateral U.S. trade pressure can be established. This also serves as part of a long-term strategy for South Korea to secure autonomy in trade and economic security amidst U.S.-China strategic competition.
3. Monitoring Indicators and Trigger Points
Key Monitoring Indicators
To track the developments of this situation, relevant ministries should continuously monitor the following indicators.
Trade and Diplomacy IndicatorsFirst and foremost, the release of the U.S. House Judiciary Committee's final report and its content must be closely watched. What has been released so far is an interim report [3][5], and whether the content and recommendations of the final report lead to official trade sanctions against South Korea is a key indicator. Furthermore, whether the Office of the U.S. Trade Representative (USTR) includes South Korea on the 'Priority Watch List' or initiates a Section 301 investigation is also an important escalation signal. The progress of the Joint Fact Sheet Implementation Consultations and changes in agenda composition must also be continuously tracked [7].
Security Cooperation IndicatorsThe confirmation of the schedule for the second round of South Korea-U.S. Nuclear Consultations is the most important indicator [5][8]. If the schedule for the second meeting continues to be delayed, it should be interpreted as a signal that the U.S. is using the Coupang issue as leverage for security cooperation. Furthermore, the normal progress of consultations related to the Extended Deterrence Consultations (NCG) and combined defense posture is also subject to monitoring. It is also necessary to carefully observe whether the Coupang issue is indirectly mentioned in consultations related to U.S. Forces Korea or defense cost-sharing negotiations.
U.S. Political IndicatorsThe release of additional statements by the White House, direct remarks by President Trump, and further letters or legislative attempts by Republican lawmakers must be tracked [1][8]. In particular, any move by the U.S. to pursue legislation related to digital service trade targeting South Korea, or to officially raise the Coupang issue as a violation of the South Korea-U.S. FTA, would be a serious escalation signal.
Trigger Points
The South Korean government must immediately escalate its response if the following situations occur.
Red Triggers (Immediate Response Required)First, if the U.S. USTR officially initiates a Section 301 investigation against South Korea or announces its designation as a Priority Watch List country. In this case, the Minister of Foreign Affairs or the Chief Negotiator for Trade must request an urgent meeting with their U.S. counterpart and immediately pursue high-level trade consultations between South Korea and the U.S. Second, if the U.S. officially postpones or suspends nuclear consultations or security cooperation agendas, citing the Coupang issue as the explicit reason. In this case, the National Security Advisor must directly contact the U.S. National Security Council (NSC) Assistant to strongly demand the separation of security cooperation agendas.
Yellow Triggers (Enhanced Monitoring and Preparatory Response)First, if the U.S. House Judiciary Committee's final report is released with recommendations for specific trade sanctions against South Korea. Second, if the schedule for the second round of nuclear consultations is further delayed by more than one month. Third, if legislation limiting South Korea's digital regulations is introduced in the U.S. Congress. In such yellow trigger situations, the Ministry of Foreign Affairs, the Ministry of Trade, Industry and Energy, and the National Security Council must jointly review response scenarios and, if necessary, prepare for high-level communication through the direct channel between the leaders of South Korea and the U.S. [2].
4. Summary Conclusion
The current Coupang discrimination controversy and White House pressure incident could serve as a typical precedent for the complex trade and security challenges South Korea will face for years to come. The structural mechanism through which South Korea's legitimate regulations on companies dominated by U.S. capital were transformed into trade pressure from the U.S. administration and Congress has operated through this incident, and this mechanism is likely to repeat itself beyond Coupang.
The primary strategic directions the South Korean government must pursue are the three pillars of 'principled defense, strategic separation, and institutional strengthening.' A principled stance, unwavering against any pressure, must be maintained regarding the legal legitimacy of the Coupang investigation [2], and it is strategically crucial to block this issue from escalating in a way that infringes upon South Korea's core security interests, such as cooperation on nuclear-powered submarines [5][8]. Simultaneously, institutional strengthening efforts must be undertaken to address the structural vulnerabilities revealed by this incident, namely the vacuum in diplomacy with the U.S. Congress and the lack of transparency in digital regulatory governance, in the mid-to-long term.
Ultimately, this incident demonstrates that the ROK-US alliance is entering a mature stage where complex interests clash not only in security cooperation but also in trade and economic spheres. While cherishing the alliance's value, South Korea must cultivate autonomous diplomatic capabilities to respond confidently and persistently to unreasonable demands [2]. This is also the path to placing the ROK-US alliance on a more robust and sustainable foundation in the long term.
References
[7] [Business Times (SG)] US House committee says South Korea discriminated against Coupang
*This text is an AI translation of an original written in Korean. Some translations or nuances may be inaccurate.