Professor Lee also connected these macro shifts to structural pressures facing the Korean economy. While acknowledging strong recovery signals in semiconductors and export-led sectors, he cautioned that market strength remains uneven and must expand to lift broader economic growth. He linked Bitcoin’s recent surge to deeper speculative behavior sparked by wavering market confidence, noting that similar volatility could spill into other risk assets if underlying anxieties persist.

In his piece, Dr. Lee assesses how these proposed tariffs could reshape Korea’s investment strategy, particularly by encouraging Korean firms to expand manufacturing operations in the United States as a means of avoiding punitive trade measures. He also explores the political dimensions of the tariff proposal, highlighting how it may serve as leverage to secure investment commitments in key U.S. states ahead of the upcoming election cycle.

The article concludes with actionable policy recommendations for Korean firms, including strategies for strengthening economic ties with U.S. state and local governments, leveraging investment announcements for political goodwill, and mitigating risk through proactive engagement. Dr. Lee’s research underscores the complex intersection of trade, politics, and corporate strategy in shaping international economic relations.

In his appearances, Dr. Lee provided expert analysis on the economic and geopolitical implications of new U.S. tariffs, South Korea’s $350 billion investment initiative, and the broader impact of trade negotiations on key industries such as semiconductors, shipbuilding, and automotive manufacturing. His insights helped international audiences better understand the complex intersections between policy, trade, and industrial growth.

Watch the interviews here:

On July 7, 2025, the White House notified South Korea that a 25 percent tariff on Korean imports would take effect on August 1 unless a new trade agreement is reached. While negotiations are ongoing, this development raises important questions about the future direction of South Korea’s investment strategy, particularly in relation to the United States.

Professor Sunhyung Lee’s analysis highlights that beyond trade balances, the letter signals strong U.S. preferences for South Korean firms to expand production and investment within America. South Korea and Japan, two of the largest foreign direct investors in the U.S., were among the first countries targeted. Recent moves, such as Hyundai Motor Group’s $5.8 billion facility announcement in Louisiana, illustrate how greenfield investments may be used to ease tensions and generate political wins tied to American manufacturing jobs.
With the August 1 deadline approaching, Korean companies face mounting pressure but also opportunity. President Trump has made clear that no extensions will be granted, pushing firms to consider proactive announcements of U.S. projects, especially in politically strategic states. Such moves could reduce tariff risks, navigate growing labor pressures at home, and build long-term goodwill with U.S. policymakers.

The article concludes that Korean companies should treat this moment not just as a challenge, but as a chance to deepen U.S. ties through visible, job-creating investments. How these decisions unfold over the next few weeks may shape U.S. – Korea economic relations for years to come.

The Korea Economic Institute of America (KEI) is a leading U.S.-based policy institute focused on enhancing public understanding of the relationship between the United States and the Republic of Korea. For over 40 years, KEI has promoted dialogue through research, publications, and events that explore key political, economic, and security issues related to the Korean Peninsula. By engaging policymakers, scholars, and the public, KEI serves as a trusted platform for in-depth analysis and discussion.

KEI hosted a public program focused on South Korea’s geoeconomic strategy and the role of industrial policy in today’s shifting global landscape. As countries around the world respond to rising geopolitical tensions, export restrictions, and protectionist trade measures, South Korea is actively reevaluating its policy tools to remain competitive. This event will explore how South Korea’s industrial policies compare to those of major global players such as the United States, China, and Japan, and will examine how Korean firms are adapting their investment strategies in response to these challenges.

Dr. Sunhyung Lee, a Non-resident Fellow at KEI, presented his latest research on the evolution of South Korea’s industrial policy and its broader economic implications. His work offers a comparative lens and highlights key trends in the behavior of South Korean firms on the global stage.

Watch the event : South Korea’s Geoeconomic Strategy: Industrial Policy in Comparative Context