Seoul – In his speech before the congress on Tuesday, President Trump said that South Korea, together with other countries such as Japan, wanted to invest “trillion dollars” in a liquefied natural gas pipeline of $ 44 billion in Alaska, which he has advertised since taking office.
But in South Korea, where the government has not made such a concrete promise, the claim is interpreted as a pressure to play ball
“An undesirable invitation to Alaska,” was a newspaper heading.
A supporter of the accused South Korean President Yoon Suk Yeol has a sign with the pictures of businessman Elon Musk, Yoon and the US President Trump.
(Ahn Young-Joon / Associated Press)
The project would build an 800 mile pipeline to transport gas from Alaska's Nordhang to Südalaska and then to Asia, where three of the world's largest importers of liquid gas or LNG: China, Japan and South Korea live.
“There has never been anything like that,” said Trump on Tuesday. “It will be really spectacular. Everything is ready to go. “
However, the proposal, which is controversial for its potential effects on the climate, was also pursued by many years of doubt about the commercial viability, with Exxonmobil, BP and Conocophilips spread out of the project in 2016.
This bumpy track record was not unnoticed in Seoul.
After a trip to Washington last month, in which the South Korean officials asked the United States to free the country of tariffs such as the tariffs recently placed on aluminum and steel, the Minister of Commerce Ahn Duk-Geun told reporters that the government had to evaluate the economic sustainability of the plan.
Since South Korea was a common goal of Trump's complaints about trade deficits, Ahn added that participation in the Alaska pipeline project could be a strategic concession that is worth being closed.
“It seemed as if the project had a great priority for the United States,” he said. “Energy imports could possibly be a map that we can play.”
In his speech on Tuesday, Trump confirmed his many years of dissatisfaction with a one -sided trade relationship with South Korea. In 2024, according to the US Bureau of Economic Analysis, the US commercial goods deficit with Korea was 66 billion dollars.
South Korea's main exports in the USA are semiconductor and cars, while its imports from the USA are led by coarse oil and machines.
“South Korea's average tariff is Four times higher,Trump said on Tuesday. “Remember. Four times higher. And we give so much help militarily and on so many other options to South Korea. But that happens. This is done by friend and enemy. “
But the South Korean government contested these figures. “This is not the case with the facts,” said an official of the Ministry of Commerce shortly after Trump's speech. “We will explain this to the United States through different channels.”
Trump seemed to have referred to the statistics of the world trade organization in the statistics of the governments of the world trade organization, which are referred to as “most -shaped nations”. In 2023, the South Korean tariff rate for these countries was 13.4% compared to 3.3% for the United States.
However, the South Korean government has said that in practice the most tariffs that flow between the two countries were eliminated due to a comprehensive free trade agreement that the two countries signed in 2007. “As a reference, the tariff set for imported manufacturing goods from the USA is 0%.”
A stack of natural gas pipes is shown. Trade analysts say that the investment in South Korea in an Alaska pipeline together with the promise to buy Alaska's gas could be the easiest way to keep all retaliation through the USA.
(San Diego Gas & Electric)
Although this means that all mutual tariffs that the United States apply to South Korea will probably only have minimal effects, but there are still fears that Trump will collect tariffs anyway to compensate for other trade barriers that he has criticized as unfair.
The most remarkable example of this is VAT or VAT, which Trump has held responsible for the $ 1.2-billion trading deficit of the United States with the rest of the world. South Korea currently raises a 10% VAT for all goods or services sold in the country, including imports.
“For the purposes of this policy of the United States, we will consider countries that are much more punishable than a tariff than that of a tariff,” Trump wrote about social of truth last month.
Trade analysts say that the investment in South Korea in the pipeline together with the promise to buy Alaska's gas could be the easiest way to keep all retaliation measures in chess, and at the same time close a 9 million ton gap that was created by the end of decades of LNG supply contracts with Qatar and Oman.
“As far as it can help to increase imports from the USA and at the same time diversify our energy supply, the pipeline could be a positive thing,” said Kang Geum-Yun, Senior Researcher at Korea International Trade Assn. “The alternative to reducing the trade deficit for the United States is to reduce our exports to you, but that is obviously not a desirable way.”
However, energy experts are not so safe.
An important point of skepticism is the forecast date of the pipeline in the early 2030s, said Kim Tae-Sik, researcher at the Korea Energy Economics Institute, a state think tank.
“South Korean companies do not have much experience in such cold conditions, so that there can be slightly unexpected delays in the construction method, not to mention potential complaints from locals or environmental groups there,” he said.
Kim believes that the pipeline would be in operation at the earliest in 2040.
“But there is a good chance that the demand for petrol in South Korea together with the broader urge will have fallen to decarbonization, which will lead to oversupply and depressive prices,” he said. “The dominant perspective among analysts here is that, to be honest, it will be very difficult to make the pipeline commercially profitable – unless the USA or Alaska bring radically attractive terms to the table.”