SEOUL: US President Donald Trump says foreign companies that fail to build factories in the United States could face tariffs of up to 300%, as South Korea faces separate pressure from Washington over how it will carry out its US$350bil US investment commitment.
Speaking at a campaign rally in Vandalia, Ohio, on Saturday, Trump presented tariffs and foreign investment as part of his economic record while campaigning for Republican candidates ahead of the Nov 3 midterm elections.
Ohio is home to a closely watched Senate race, with the economy and cost of living among major campaign issues.
Trump said overseas companies would be given about a year and a half to build plants in the United States before facing tariffs ranging from 150% to 300%.
He also named South Korea alongside China, Japan and Canada, while arguing that his tariff policy had pushed foreign companies to invest in United States manufacturing.
The remarks came a day after Trump increased pressure on Seoul over the Alaska liquefied natural (LNG) gas project, which has emerged as a point of disagreement in implementing the two countries’ trade and investment agreement.
South Korea agreed last year to invest US$350bil in the United States in return for lowering tariffs on South Korean goods from 25% to 15%.
The package comprises US$150bil for shipbuilding cooperation and US$200bil for strategic investment.
Trump last week presented South Korean participation in Alaska LNG as part of the strategic investment package.
Seoul says otherwise, maintaining that it has agreed only to begin reviewing the project and has not made a final decision on whether or how much to invest.
Trump last Friday rejected suggestions that he had moved too quickly in announcing South Korean participation.
“I didn’t jump the gun. I mean, they were there and they were represented,” Trump said.
He later added that if South Korea did not want to proceed, “that’s okay with me. I’ll just charge them more”.
Seoul’s caution is tied in large part to the project’s economics. Lead developer Glenfarne Group estimated Alaska LNG would cost between US$44.5bil and US$54.5bil.
Reuters reported that its cost per unit of annual production capacity would be more than twice that of many recent US Gulf Coast LNG projects.
The project would require a 1,287 km pipeline from Alaska’s North Slope to Nikiski, as well as a gas treatment plant and liquefaction terminal.
President Lee Jae Myung said in September that commercial viability had become a sticking point in negotiations with Washington, including how returns would be shared and how losses from unprofitable projects would be handled.
Seoul had pushed to include the term “commercially reasonable” in the investment agreement, Lee said.
Industry Minister Kim Jung-kwan has said South Korea should not put money into projects that fail to meet commercial standards, and acknowledged that pulling out of projects under the agreement could expose Seoul to renewed tariff pressure.
The first confirmed project under the strategic investment package is a gas-fired power plant in Encinal, Texas.
South Korea and the United States have also discussed building eight large nuclear reactors, but South Korean officials said those projects still require separate reviews before any final investment decisions are made. — The Korea Herald/ANN
