South Korea stands at an inflection point in its modern economic story. Once an exemplar of export-led growth and global competitiveness, it now risks undermining the very institutions that made that success possible.
Following a landmark trade deal negotiated by President Trump and his team in July 2025, South Korea is primed for a strong future by deepening financial ties with America’s rebounding economy.
To make that economic future a reality, South Korea must respect the ideals of Western free market capitalism and abandon their recent targeting of U.S.-based companies.
President Lee Jae-myung’s handling of recent enforcement actions against foreign-linked technology firms – most visibly U.S. firms – reveals a deeply troubling trend: the politicization of economic governance and the creation of an environment unmoored from the rule of law.
That environment has increasingly allowed successful companies like Amazon, Coupang, Google, Meta, Netflix, and others to be vilified – not for wrongdoing proven through due process, but for their scale, reach, and perceived political convenience.
In November, President Lee's administration began investigating Coupang, a U.S. based e-commerce company, for alleged data security failures, which is within any regulator’s right. Several weeks later, three of the world’s top cybersecurity and forensics firms confirmed the data breach was 100% contained, and there was no harm done to Korean consumers.
That should have been the end of it.
But what has unfolded in Seoul since goes far beyond ordinary regulatory scrutiny – and far beyond what America and President Trump should expect from a trade ally.
President Lee and selected Korean lawmakers are publicly calling for Coupang to be shut down, and for its acting CEO – an American citizen – to be charged with perjury, prevented from leaving the country, and even jailed.
These actions far exceed global norms.
Korean regulators are also fast-tracking new legislation aimed at restricting the ability of all U.S. tech companies from doing business in Korea.
Ironically, thousands of Korean small and medium businesses depend on Coupang to support their livelihood. In fact, Coupang is the second largest employer in Korea.
It's also been the largest source of U.S. foreign direct investment into Korea, topping $1.2 billion in 2021 alone – 48% of all U.S.-to-Korea FDI.
Said differently, hurting Coupang hurts Koreans.
In this environment, American companies’ success in the global marketplace begins to look like a liability. U.S. firms with foreign listings, international capital, or cross-border operations find themselves exposed to domestic power struggles that have little to do with consumer protection.
The deeper issue is not about just one company or one case.
It's the signal this approach sends to investors, entrepreneurs, and allied governments. When politics intrudes into enforcement, retaliation rather than resolution becomes the incentive.
In Korea, these antagonistic activities are also widening a national security risk with China, as Chinese firms face much less regulatory scrutiny around their Korea-based operations.
With President Lee’s commentary during a recent meeting with President Xi Jinping that he hopes to fully restore Korea's ties with China by next year, this should be sounding multiple alarms in Washington, D.C.
That concern is amplified by the perception that enforcement pressure falls hardest on American companies, while competitors tied to China face far less scrutiny.
At a time when allies are expected to coordinate against economic coercion and unfair trade practices, such asymmetry undermines trust.
South Korea's alliance with the U.S. rests not only on shared national security interests, but on shared assumptions about fairness, transparency, and the rule of law. When those assumptions erode, so does the foundation of cooperation on trade, technology, and geopolitical risk.
But a possible reset is achievable.
That begins with pulling economic governance back from the realm of political theater and restoring confidence that evidence, proportionality, and due process guide enforcement decisions.
And it means reaffirming that accountability will be applied evenly, regardless of a company's nationality or market success.
A democratic society that values innovation must also safeguard impartial governance.
When executive and legislative power converge to single out firms as symbols rather than subjects of law, they corrode investor confidence and discourage the very entrepreneurship that drives growth.
That is a self-imposed handicap no nation competing in the 21st-century economy can afford.
South Korea still has a choice.
It can demonstrate that strong institutions, not political expediency, define its regulatory landscape.
President Lee can also remind the world that South Korea's remarkable economic ascent was built on free market economics and trust in the rule of law – principles that must remain unshakable if the country’s future is to match its past.
Chad F. Wolf served as the acting Secretary of Homeland Security during President Trump’s first administration.
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